<SUBMISSION>
<ACCESSION-NUMBER>0000930661-02-004176
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20021122
<ITEMS>5
<ITEMS>7
<FILING-DATE>20021202
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>HORTON D R INC /DE/
<CIK>0000882184
<ASSIGNED-SIC>1531
<IRS-NUMBER>752386963
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>001-14122
<FILM-NUMBER>02846284
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1901 ASCENSION BLVD
<STREET2>STE 100
<CITY>ARLINGTON
<STATE>TX
<ZIP>76006
<PHONE>8178568200
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1901 ASCENSION BLVD
<STREET2>SUITE 100
<CITY>ARLINGTON
<STATE>TX
<ZIP>76006
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
  <BODY BGCOLOR="WHITE">

 <HR SIZE="3" NOSHADE COLOR="#000000" ALIGN="left"><DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="5" COLOR="#000000"><B>SECURITIES AND EXCHANGE COMMISSION
</B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Washington, D. C. 20549 </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <HR SIZE="1" NOSHADE WIDTH="17%" COLOR="#000000"><DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="5" COLOR="#000000"><B>FORM 8-K </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"
COLOR="#000000"><B>Current Report </B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="3" COLOR="#000000"><B>Pursuant to Section 13 or 15(d) of the </B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="3"
COLOR="#000000"><B>Securities Exchange Act of 1934 </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>November 22, 2002 </B></FONT></DIV> <DIV ALIGN="center"><FONT
FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(Date of Report&#151;Date of Earliest Event Reported) </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <HR SIZE="1" NOSHADE WIDTH="17%" COLOR="#000000"><DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="6" COLOR="#000000"><B>D.R. Horton, Inc. </B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(Exact Name of Registrant as
Specified in its Charter) </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="31%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Delaware</B></FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="31%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>1-14122</B></FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="31%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>75-2386963</B></FONT></DIV> </TD> </TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="31%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(State or Other Jurisdiction</B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>of
Incorporation)</B></FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="31%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(Commission File Number)</B></FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="31%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(IRS Employer</B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Identification
No.)</B></FONT></DIV> </TD> </TR>
 </TABLE> </DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>1901 Ascension Boulevard, Suite 100, Arlington, Texas 76006
</B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(Address of Principal Executive Offices) </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman"
SIZE="2" COLOR="#000000"><B>(817) 856-8200 </B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(Registrant&#146;s Telephone Number, Including Area Code) </B></FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>(Former Name or Former Address, if Changed Since Last Report) </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <HR SIZE="3" NOSHADE
COLOR="#000000" ALIGN="left">

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>Item 5.&nbsp;&nbsp;&nbsp;&nbsp;Other Events. </B></FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 1.1 hereto is the Underwriting Agreement, dated as of November 22, 2002, among D.R. Horton, Inc., the Guarantors named therein and
Banc of America Securities LLC. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 4.1 hereto is the Fifteenth Supplemental Indenture to be executed by D.R.
Horton, Inc., the Guarantors named therein and American Stock Transfer &amp; Trust Company, as trustee, relating to the 7.5% Senior Notes Due 2007 of D.R. Horton, Inc. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
STYLE="text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 5.1 hereto is the opinion of Gibson, Dunn &amp; Crutcher LLP, Dallas, Texas. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2" COLOR="#000000">Exhibit 12.1 hereto is the statement of computation of ratios of earnings to fixed charges. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000"><B>Item 7.&nbsp;&nbsp;&nbsp;&nbsp;Financial Statements and Exhibits. </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>(c)&nbsp;&nbsp;&nbsp;&nbsp;Exhibits.
</B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="95%" BORDER="0">

<TR>
<TD VALIGN="top" ALIGN="right" WIDTH="5%"> <DIV ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">1.1</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="94%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Underwriting Agreement, dated as of November 22, 2002, among D.R. Horton, Inc., the Guarantors named therein and Banc of America Securities LLC.</FONT></DIV>
</TD> </TR>
<TR>
<TD HEIGHT="8"> </TD> </TR>
<TR>
<TD VALIGN="top" ALIGN="right" WIDTH="5%"> <DIV ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">4.1</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="94%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Fifteenth Supplemental Indenture to be executed by D.R. Horton, Inc., the Guarantors named therein and American Stock Transfer &amp; Trust Company, as
trustee, relating to the 7.5% Senior Notes Due 2007 of D.R. Horton, Inc.</FONT></DIV> </TD> </TR>
<TR>
<TD HEIGHT="8"> </TD> </TR>
<TR>
<TD VALIGN="top" ALIGN="right" WIDTH="5%"> <DIV ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">5.1</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="94%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Opinion of Gibson, Dunn &amp; Crutcher LLP, Dallas, Texas.</FONT></DIV> </TD> </TR>
<TR>
<TD HEIGHT="8"> </TD> </TR>
<TR>
<TD VALIGN="top" ALIGN="right" WIDTH="5%"> <DIV ALIGN="right"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">12.1</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="94%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Statement of computation of ratios or earnings to fixed charges.</FONT></DIV> </TD> </TR>
 </TABLE> </DIV>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>SIGNATURE </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
STYLE="text-indent:4%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly
authorized. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Date:&nbsp;&nbsp;&nbsp;&nbsp;December 2, 2002 </FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="right">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="40%" BORDER="0">

<TR>
<TD VALIGN="top" COLSPAN="3" WIDTH="37%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">D. R. Horton, Inc.</FONT></DIV> </TD> </TR>
<TR>
<TD HEIGHT="49"> </TD> </TR>
<TR>
<TD VALIGN="top" WIDTH="2%"> <DIV STYLE="margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">By:</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="37%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">/s/ Samuel R. Fuller</FONT></DIV> <HR SIZE="1" NOSHADE COLOR="#000000" ALIGN="left"></TD> </TR>
<TR>
<TD> <FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="37%"> <DIV STYLE="margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Samuel R. Fuller</FONT></DIV> <DIV STYLE="margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2"
COLOR="#000000">Executive Vice President, Treasurer, and</FONT></DIV> <DIV STYLE="margin-left:2%; text-indent:-2%"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Chief Financial Officer</FONT></DIV> </TD> </TR>
 </TABLE> </DIV>

<p Style='page-break-before:always'>
<HR  SIZE="3" COLOR="#999999" WIDTH="100%" ALIGN="CENTER">

 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000"><B>EXHIBIT INDEX </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
ALIGN="center">
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0">

<TR>
<TD VALIGN="bottom" ALIGN="center"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Exhibit Number</B></FONT></DIV> <HR SIZE="1" NOSHADE WIDTH="36" COLOR="#000000"></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="92%"> <DIV><FONT FACE="Times New Roman" SIZE="1" COLOR="#000000"><B>Exhibit</B></FONT></DIV> <HR SIZE="1" NOSHADE WIDTH="31" ALIGN="left" COLOR="#000000"></TD> </TR>
<TR>
<TD HEIGHT="8"> </TD> </TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="7%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;1.1</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="92%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Underwriting Agreement, dated as of November 22, 2002, among D.R. Horton, Inc., the Guarantors named therein and Banc of America Securities LLC.</FONT></DIV>
</TD> </TR>
<TR>
<TD HEIGHT="8"> </TD> </TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="7%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;4.1</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="92%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Fifteenth Supplemental Indenture to be executed by D.R. Horton, Inc., the Guarantors named therein and American Stock Transfer &amp; Trust Company, as
trustee, relating to the 7.5% Senior Notes Due 2007 of D.R. Horton, Inc.</FONT></DIV> </TD> </TR>
<TR>
<TD HEIGHT="8"> </TD> </TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="7%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">&nbsp;&nbsp;5.1</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="92%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Opinion of Gibson, Dunn &amp; Crutcher LLP, Dallas, Texas.</FONT></DIV> </TD> </TR>
<TR>
<TD HEIGHT="8"> </TD> </TR>
<TR>
<TD VALIGN="top" ALIGN="center" WIDTH="7%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">12.1</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="92%"> <DIV><FONT FACE="Times New Roman" SIZE="2" COLOR="#000000">Statement of computation of ratios of earnings to fixed charges.</FONT></DIV> </TD> </TR>
 </TABLE> </DIV>
 </BODY></HTML>

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-1.1
<SEQUENCE>3
<FILENAME>dex11.txt
<DESCRIPTION>UNDERWRITING AGREEMENT
<TEXT>
<PAGE>

                                                                     Exhibit 1.1

                                  $215,000,000

                                D.R. HORTON, INC.

                           7.5% Senior Notes due 2007

                             UNDERWRITING AGREEMENT

                                                               November 22, 2002



Banc of America Securities LLC
Wachovia Securities, Inc.
  c/o Banc of America Securities LLC
      9 West 57th Street
      Capital Markets, 31st Floor
      New York, New York 10019

Banc One Capital Markets, Inc.
1 Bank One Plaza, 8th Floor
Chicago, Illinois 60670

Ladies and Gentlemen:

          D.R. Horton, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell $215,000,000 aggregate principal amount of its 7.5% Senior Notes
due 2007 (the "Notes") to Banc of America Securities LLC ("Banc of America") and
Wachovia Securities, Inc. ("Wachovia"). In addition, Banc One Capital Markets,
Inc. ("Banc One," and together with Banc of America and Wachovia, the
"Underwriters") has agreed to participate as a "qualified independent
underwriter" (in such capacity, the "QIU") within the meaning of the NASD
Conduct Rules, in connection with the offering of the Notes. The Notes are to be
issued pursuant to the provisions of an Indenture dated as of June 9, 1997 as
supplemented (the "Base Indenture") and a supplemental indenture to be dated as
of December 3, 2002 (the "Supplemental Indenture" and together with the Base
Indenture, the "Indenture") among the Company, certain subsidiaries of the
Company and American Stock Transfer and Trust Company, as Trustee (the
"Trustee"). The Company's obligations under the Indenture and the Notes will be
unconditionally guaranteed (the "Guarantees"), jointly and severally, by each of
the subsidiaries of the Company listed on the signature pages hereof (the
"Guarantors"). The Company and the Guarantors are collectively referred to
herein as the "Issuers" and the Notes and the Guarantees are collectively
referred to herein as the "Securities."

<PAGE>

                                       -2-

          1. Registration Statement and Prospectus. The Company has prepared and
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the provisions of the Securities Act of 1933, as amended, and
the published rules and regulations of the Commission thereunder (collectively,
the "Act"), a registration statement on Form S-3 (No. 333-84088), including a
base prospectus relating to the Securities. The registration statement as
amended at the time it became effective on March 27, 2002, including information
(if any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is hereinafter referred to as
the "Registration Statement"; and the base prospectus dated March 27, 2002 (the
"Base Prospectus"), as supplemented by the prospectus supplement relating to the
Securities in the form first used to confirm sales of Securities (the
"Prospectus Supplement"), is hereinafter referred to as the "Prospectus." Any
reference herein to the Registration Statement, a preliminary prospectus or the
Prospectus shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Act, as of the
effective date of the Registration Statement or the date of such preliminary
prospectus or the Prospectus (the "Incorporated Documents"), and, except as
otherwise indicated, when reference is made to information "in" (including by
use of the terms "set forth in," "described in" and similar terms) the
Prospectus or the Registration Statement, such reference shall be deemed to
include information incorporated by reference in the Prospectus or the
Registration Statement, as the case may be.

          2. Agreements To Sell and Purchase. The Company agrees to issue and
sell, and, on the basis of the representations and warranties contained in this
Underwriting Agreement (the "Agreement") and subject to its terms and
conditions, each of the Underwriters agree, severally and not jointly, to
purchase from the Company, the aggregate principal amount of the Notes set forth
opposite such Underwriter's name on Schedule A hereto. The aggregate purchase
price shall be 99.6308% of the principal amount thereof ($214,206,220), plus
accrued interest, if any, from December 3, 2002 to the date of payment and
delivery (the "Purchase Price").

          3. Terms of Public Offering. The Company is advised by the
Underwriters that the Underwriters propose to make a public offering of the
Securities as soon after the execution and delivery of this Agreement as in
judgment of the Underwriters is advisable on the basis set forth in the
Prospectus Supplement.

          4. Delivery and Payment. Delivery to the Underwriters of and payment
for the Securities shall be made at 10:00 A.M., New York City time, on December
3, 2002 (the "Closing Date"), at such place as you shall designate. The Closing
Date and the location of delivery of and the form of payment for the Securities
may be varied by agreement between you and the Company. On the Closing Date, the
Underwriters will make a payment to the Company in an amount previously agreed
to by the Company and the Underwriters for a portion of the Company's expenses
of the offering of the Securities (such payment, the "Expense Reimbursement").

          Certificates for the Securities shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date. Such certificates shall be made
available to you for inspection not later

<PAGE>

                                       -3-

than 9:30 A.M., New York City time, on the business day next preceding the
Closing Date. Certificates in definitive form evidencing the Securities shall be
delivered to you on the Closing Date with any transfer taxes thereon duly paid
by the Company, for the account of the Underwriters, against payment of the
Purchase Price (net of the Expense Reimbursement) therefor by wire or certified
or official bank checks payable in Federal funds to the order of the Company. If
the Securities will be issued in book-entry form, the Company shall deposit the
global certificate(s) representing the Securities with the Depository Trust
Company ("DTC"), or its designated custodian, on the Closing Date, and the
Company will deliver such global certificate(s) to the Underwriters by causing
DTC to credit the Securities to the accounts of the Underwriters at DTC against
payment therefor as set forth above.

          5. Agreements of the Issuers. The Issuers, jointly and severally,
agree with each Underwriter as follows:

          (a) The Issuers will, if necessary or required by law, file an
     amendment to the Registration Statement or, if necessary pursuant to Rule
     430A under the Act, a post-effective amendment to the Registration
     Statement, as soon as practicable after the execution and delivery of this
     Agreement, and will use their best efforts to cause the Registration
     Statement or such post-effective amendment to become effective at the
     earliest possible time. The Company will comply fully and in a timely
     manner with the applicable provisions of Rule 424 and Rule 430A under the
     Act.

          (b) The Issuers will advise you promptly and, if requested by you,
     will confirm such advice in writing: (i) of the effectiveness of any
     amendment to the Registration Statement; (ii) of the transmission to the
     Commission for filing of any supplement to the Prospectus (including any
     document that would as a result of such filing become an Incorporated
     Document) and to furnish you with copies thereof; (iii) of the receipt of
     any comments from the Commission that relate to the Registration Statement
     or of any request by the Commission for amendment of or a supplement to the
     Registration Statement or the Prospectus or for additional information;
     (iv) of the issuance by the Commission of any stop order suspending the
     effectiveness of the Registration Statement or any order preventing or
     suspending the use of the Prospectus or of the suspension of qualification
     of the Securities for offering or sale in any jurisdiction or the
     initiation or the threatening of any proceeding for such purpose; and (v)
     within the period of time referred to in paragraph (e) below, of any change
     in the Company's condition (financial or other), business, prospects,
     properties, net worth or results of operations, or of the happening of any
     event, which makes any statement of a material fact made in the
     Registration Statement or the Prospectus (as then amended or supplemented)
     untrue or which requires the making of any additions to or changes in the
     Registration Statement or the Prospectus (as then amended or supplemented)
     in order to state a material fact required to be stated therein or
     necessary in order to make the statements therein not misleading, or of the
     necessity to amend or supplement the Prospectus (as then amended or
     supplemented) to comply with the Act or any other law. If at any

<PAGE>

                                       -4-

     time any stop order suspending the effectiveness of the Registration
     Statement or any order preventing or suspending the use of the Prospectus
     or suspending any such qualification shall be issued, the Issuers will
     promptly use their best efforts to obtain the withdrawal of such order at
     the earliest possible time.

          (c) The Issuers will furnish to you, without charge, (i) five copies
     of the registration statement as originally filed with the Commission and
     of each amendment thereto, including all exhibits thereto, (ii) the
     Prospectus and any amendment or supplement thereto, (iii) such number of
     copies of the registration statement as originally filed and of each
     amendment thereto, but without exhibits, as you may request, (iv) such
     number of copies of the Incorporated Documents, without exhibits, as you
     may request, and (v) five copies of the exhibits to the Incorporated
     Documents.

          (d) The Issuers will not file any amendment to the Registration
     Statement or make any amendment or supplement to the Prospectus or, prior
     to the end of the period of time referred to in paragraph (e) below, file
     any document which, upon filing becomes an Incorporated Document, of which
     you shall not previously have been advised or to which, after you shall
     have received a copy of the document proposed to be filed, you shall
     reasonably object.

          (e) As soon after the execution and delivery of this Agreement as
     possible and thereafter from time to time for such period as in the opinion
     of counsel for the Underwriters a prospectus is required by the Act to be
     delivered in connection with sales by any Underwriter or any dealer, the
     Issuers will expeditiously deliver to the Underwriters and each dealer,
     without charge, as many copies of the Prospectus (and of any amendment or
     supplement thereto) as you may reasonably request. The Issuers consent to
     the use of the Prospectus (and of any amendment or supplement thereto) in
     accordance with the provisions of the Act and with the securities or Blue
     Sky laws of the jurisdictions in which the Securities are offered by any
     Underwriter and by all dealers to whom Securities may be sold, both in
     connection with the offering and sale of the Securities and for such period
     of time thereafter as the Prospectus is required by the Act to be delivered
     in connection with sales by any Underwriter or any dealer.

          (f) If during the period of time referred to in paragraph (e) above
     any event shall occur as a result of which, in the judgment of the Issuers
     or in the opinion of counsel for the Underwriters, it becomes necessary to
     amend or supplement the Prospectus in order to make the statements therein,
     in the light of the circumstances when the Prospectus is delivered to a
     purchaser, not misleading, or if it is necessary to amend or supplement the
     Prospectus to comply with the Act or any other law, the Issuers will
     forthwith prepare and, subject to the provisions of paragraph (d) above,
     file with the Commission an appropriate amendment or supplement to the
     Prospectus so that the statements in the Prospectus, as so amended or
     supplemented, will not, in the light of the circumstances when it is so
     delivered, be misleading, or so that the Pro-

<PAGE>

                                       -5-

     spectus will comply with law, and to furnish to the Underwriters and to
     such dealers as you shall specify such number of copies thereof as the
     Underwriters or such dealers may reasonably request. In the event that the
     Issuers and you agree that the Prospectus should be amended or
     supplemented, the Issuers, if requested by you, will promptly issue a press
     release, in compliance with applicable securities laws, announcing or
     disclosing the matters to be covered by the proposed amendment or
     supplement.

          (g) The Issuers will cooperate with you and with counsel for the
     Underwriters in connection with the registration or qualification of the
     Securities for offering and sale by any Underwriter and by dealers under
     the securities or Blue Sky laws of such jurisdictions as you may designate
     and will file such consents to service of process or other documents
     necessary or appropriate in order to effect such registration or
     qualification; provided, however, that in no event shall any Issuer be
     obligated to qualify to do business in any jurisdiction where it is not now
     so qualified or to take any action which would subject it to service of
     process in suits, other than those arising out of the offering or sale of
     the Securities, in any jurisdiction where it is not now so subject.

          (h) The Issuers will make generally available to its security holders
     a consolidated earnings statement, which need not be audited, covering a
     twelve-month period commencing after the date of the Prospectus and ending
     not later than 15 months thereafter, as soon as practicable after the end
     of such period, which consolidated earnings statement shall satisfy the
     provisions of Section 11(a) of the Act and Rule 158 thereunder, and will
     advise you in writing when such statement has been made available.

          (i) During the period of five years hereafter, the Issuers will
     furnish to you as soon as available, a copy of all public materials
     furnished by the Company to its stockholders and all public reports and
     financial statements furnished by the Company to the principal national
     securities exchange upon which the common stock of the Company may be
     listed pursuant to requirements of or agreements with such exchange or to
     the Commission.

          (j) The Company will apply the net proceeds from the sale of the
     Securities in accordance with the description set forth in the Prospectus
     under the caption "Use of Proceeds."

          (k) Neither the Company nor any of its subsidiaries has taken, or will
     take, directly or indirectly, any action designed to or that might
     reasonably be expected to cause or result in stabilization or manipulation
     of the price of the Securities to facilitate the sale or resale of the
     Securities.

          (l) The Issuers will pay all costs, expenses, fees and taxes incident
     to (i) the preparation, printing, filing and distribution under the Act of
     the Registration State-

<PAGE>

                                       -6-

     ment (including financial statements and exhibits), and all amendments and
     supplements thereto prior to or during the period specified in paragraph
     (e) above, (ii) the preparation of the Indenture, the issuance of the Notes
     and the fees of the Trustee; (iii) the printing and delivery (including
     postage, air freight charges and charges for counting and packaging) of
     such copies of the Prospectus and all amendments or supplements thereto
     during the period specified in paragraph (e) above, (iv) the printing and
     delivery of this Agreement, the Preliminary and Supplemental Blue Sky
     Memoranda and all other agreements, memoranda, correspondence and other
     documents printed and delivered in connection with the offering of the
     Securities (including in each case any disbursements of counsel for the
     Underwriters relating to such printing and delivery), (v) the registration
     or qualification of the Securities for offer and sale under the securities
     or Blue Sky laws of the several states (including in each case the
     reasonable fees and disbursements of counsel for the Underwriters relating
     to such registration or qualification and memoranda relating thereto), (vi)
     filings and clearance with the National Association of Securities Dealers,
     Inc. in connection with the offering, (vii) the listing, if any, of the
     Securities on any national securities exchange and (viii) furnishing such
     copies of the Registration Statement, the Prospectus and all amendments and
     supplements thereto as may be requested for use in connection with the
     offering or sale of the Securities by any Underwriter or by dealers to whom
     Securities may be sold. The Issuers will also pay the $100,000 fee of the
     QIU.

          (m) The Issuers will not during the period beginning on the date
     hereof and continuing to and including the Closing Date, offer, sell,
     contract to sell or otherwise dispose of any debt securities of the Company
     or any warrants, options or other rights to purchase or acquire debt
     securities of the Company or any securities convertible into or
     exchangeable for debt securities of the Company (other than (i) the
     Securities and (ii) commercial paper issued in the ordinary course of
     business), without the prior written consent of Banc of America.

          (n) The Issuers will use their best efforts to do and perform all
     things required or necessary to be done and performed under this Agreement
     by the Issuers prior to the Closing Date and to satisfy all conditions
     precedent to the delivery of the Securities.

          6. Representations and Warranties of the Issuers. The Issuers, jointly
and severally, represent and warrant to each Underwriter that:

          (a) Each preliminary prospectus included as part of the registration
     statement as originally filed or as part of any amendment or supplement
     thereto, or filed pursuant to Rule 424 under the Act, complied when so
     filed in all material respects with the provisions of the Act. The
     Commission has not issued any order preventing or suspending the use of any
     preliminary prospectus.

<PAGE>

                                      -7-

     (b) The Registration Statement has become effective and at the date of the
Prospectus (if different), including at the date of any post-effective amendment
or supplement, the Registration Statement will comply in all material respects
with the provisions of the Act, and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; the Prospectus (and
any supplements or amendments thereto) will at all such times comply in all
material respects with the provisions of the Act and will not at any such time
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however,
that no representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance upon and
in conformity with written information furnished to the Issuers with respect to
the Underwriters specifically for inclusion therein.

     (c) The Incorporated Documents, at the time they were filed with the
Commission or, to the extent such documents were subsequently amended prior to
the date hereof, at the time so amended, complied in all material respects with
the requirements of the Act or the Securities Exchange Act of 1934, as amended,
and the published rules and regulations of the Commission thereunder
(collectively, the "Exchange Act"), as applicable, and such documents do not on
the date hereof and will not on the Closing Date contain an untrue statement of
a material fact and do not on the date hereof and will not on the Closing Date
omit to state a material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading.

     (d) The financial statements (including the related notes and supporting
schedules) in the Registration Statement or the Prospectus present fairly the
consolidated financial position and results of operations of the entities
purported to be shown thereby, at the dates and for the periods indicated, and
have been prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except for
changes in accounting principles described therein. The pro forma financial
statements and other pro forma financial information (including the notes
thereto) in the Prospectus have been prepared in all material respects in
accordance with applicable requirements of Regulation S-X promulgated under the
Exchange Act and have been properly computed on the bases described therein. The
material assumptions used in the preparation of the pro forma financial
statements and other pro forma information in the Prospectus are set forth
therein and are reasonable, and the adjustments used therein are appropriate to
give pro forma effect to the transactions or circumstances referred to therein.

     (e) Ernst & Young, LLP, who have reported on the financial statements of
the Company, are independent public accountants with respect to the Company and
its

<PAGE>

                                      -8-

subsidiaries as required by the Act and, to the Company's knowledge, are not in
violation of the auditor independence requirements of the Sarbanes-Oxley Act of
2002 (the "Sarbanes-Oxley Act").

     (f) [RESERVED]

     (g) The Company and each of its subsidiaries have been duly formed and are
validly existing in good standing under the laws of their respective
jurisdictions of organization, are duly qualified to do business and are in good
standing in each jurisdiction in which their respective ownership or lease of
property or the conduct of their respective businesses requires such
qualification except where the failure to so qualify, singly or in the
aggregate, would not have a material adverse effect on the financial condition,
results of operations, business or prospects of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect"), and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged.

     (h) The Company has an authorized capitalization as set forth in the
Prospectus; and all of the issued equity interests of each subsidiary of the
Company have been duly authorized and validly issued and, as to shares of
capital stock of any corporation constituting a subsidiary, are fully paid and
non-assessable and (except for directors' qualifying shares as disclosed in the
Registration Statement or the Prospectus or minority interests in non-Guarantor
subsidiaries) are owned directly or indirectly by the Company, free and clear of
all liens, encumbrances, equities or claims other than restrictions on transfer
imposed by applicable securities laws.

     (i) The execution, delivery and performance of this Agreement, the
Indenture and the Securities by the Issuers, compliance by the Issuers of all
the provisions hereof and thereof and the consummation of the transactions
contemplated hereby will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject, nor
will such actions result in any violation of the provisions of the
organizational documents of the Company or any of its subsidiaries or any
statute or any order, rule or regulation of any court or governmental agency or
body having jurisdiction over the Company or any of its subsidiaries or any of
their property or assets; and except for such consents, approvals,
authorizations, registrations or qualifications as may be required under the Act
or applicable state or foreign securities laws in connection with the purchase
and distribution of the Securities by any Underwriter, no consent, approval,
authorization or order of, or filing or registration with, any such court or
governmental agency or body is required for the execution, delivery and
performance of

<PAGE>

                                      -9-

this Agreement, the Indenture and the Securities by the Issuers, compliance by
the Issuers of all the provisions hereof and thereof and the consummation of the
transactions contemplated hereby.

     (j) This Agreement has been duly authorized, executed and delivered by the
Issuers and is a valid and binding agreement of the Issuers enforceable in
accordance with its terms (except as rights to indemnity and contribution
hereunder may be limited by applicable law).

     (k) The Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the "TIA"), and has been duly authorized, executed and
delivered by the Issuers and is a valid and binding agreement of the Issuers,
enforceable in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally and (ii) rights of acceleration and the availability
of equitable remedies may be limited by equitable principles of general
applicability.

     (l) The Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to each of the Underwriters against payment therefor as provided by this
Agreement, will be entitled to the benefits of the Indenture, and will be valid
and binding obligations of the Company, enforceable in accordance with their
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally and (ii) rights
of acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.

     (m) The Guarantees have been duly authorized and, upon endorsement on the
Notes by the Guarantors, execution and authentication of the Notes in accordance
with the provisions of the Indenture and delivery of the Notes to each of the
Underwriters against payment therefor as provided by this Agreement, will be
entitled to the benefits of the Indenture, and will be valid and binding
obligations of the Guarantors, enforceable in accordance with their terms except
as (i) the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.

     (n) The Securities and the Indenture conform to the description thereof in
the Prospectus.

     (o) Neither the Company nor any of its subsidiaries has sustained, since
the date of the latest audited financial statements in the Prospectus, any loss
or interference with the business of the Company and its subsidiaries taken as a
whole from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any

<PAGE>

                                      -10-

labor dispute or court or governmental action, order or decree, otherwise than
as set forth or contemplated in the Prospectus, resulting in a Material Adverse
Effect; and, since such date, there has not been any material change in the
capital stock or long-term debt of the Company or any of its subsidiaries or any
material adverse change, or any development involving a prospective material
adverse change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and its
subsidiaries taken as a whole, otherwise than as set forth or contemplated in
the Prospectus.

     (p) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to any
other registration statement filed by the Company under the Act.

     (q) The Company and its subsidiaries own the items of real property and
personal property purported to be owned by them which are material to the
conduct of the business of the Company and its subsidiaries taken as a whole,
free and clear of all liens, encumbrances and defects, except such as are
described in the Prospectus or such as would not have a Material Adverse Effect.
All real property held under lease by the Company and its subsidiaries are held
by them under valid, subsisting and enforceable leases, with such exceptions as
are described in the Prospectus or such as would not have a Material Adverse
Effect.

     (r) Except as described in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its subsidiaries
is a party or of which any property or assets of the Company or any of its
subsidiaries is the subject which are reasonably likely to have a Material
Adverse Effect; and to the Issuers' knowledge, no such proceedings are
threatened by governmental authorities or by others.

     (s) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.

     (t) To the Issuers' knowledge, all real property owned (either presently or
at any time in the past) or presently leased by the Company and its subsidiaries
in connection with the operation of their business, including, without
limitation, any subsurface soils and ground water (collectively, the "Realty"),
is free of contamination from any substance or material presently known to be
toxic or hazardous, including, without limitation, any radioactive substance,
methane, volatile hydrocarbons or industrial solvents (each, a "Hazardous
Substance"), which could reasonably be expected to materially

<PAGE>

                                      -11-

impair the beneficial use thereof by the Company and its subsidiaries or
constitute or cause a significant health, safety or other environmental hazard
to occupants or users (except for contaminations which would not have a Material
Adverse Effect); and to the Issuers' knowledge, the Realty does not contain any
underground storage or treatment tanks, active or abandoned water, gas or oil
wells, or any other underground improvements or structures, other than the
foundations, footings or other supports for the improvements located thereon,
the presence of which would have a Material Adverse Effect. Notwithstanding the
foregoing, Hazardous Substances shall be deemed not to include any supplies or
substances maintained, used, stored or held on the Realty which are (i)
naturally occurring, (ii) installed by public utilities or (iii) used in the
ordinary course of the Company's or its subsidiaries' business, provided that
such supplies or substances are stored, used, maintained and held in all
material respects in accordance with any applicable governmental requirements
and with restrictions, conditions and standards suggested by the manufacturer
and the Company's insurance carriers.

     (u) The Company and its subsidiaries carry, or are covered by, insurance in
such amounts and covering such risks as is adequate for the conduct of their
respective businesses.

     (v) The Company and its subsidiaries own or possess adequate rights to use
all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, service mark registrations, copyrights and
licenses necessary for the conduct of their respective businesses the absence of
which would have a Material Adverse Effect and have no reason to believe that
the conduct of their respective businesses will conflict with, and have not
received any notice of any claim of conflict with, any such rights of others.

     (w) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration Statement
by the Act which have not been described in the Prospectus or filed as exhibits
to the Registration Statement or incorporated therein by reference as permitted
by the Act.

     (x) No labor disturbance by the employees of the Company or any of its
subsidiaries exists or, to the Issuers' knowledge, is imminent which could
reasonably be expected to have a Material Adverse Effect.

     (y) The Company and its subsidiaries have filed all federal, state and
local income and franchise tax returns required to be filed through the date
hereof and has paid all taxes due thereon, except where the failure to do so has
not had and would reasonably not be expected to have a Material Adverse Effect,
and no tax deficiency has been determined adversely to the Company or any of its
subsidiaries which has had

<PAGE>

                                      -12-

     (nor does any Issuer have any knowledge of any tax deficiency which would
     reasonably likely have) a Material Adverse Effect.

          (z) Since the date as of which information is given in the Prospectus,
     and except as may otherwise be disclosed in the Prospectus, neither the
     Company nor any of its subsidiaries has (i) entered into any material
     transaction not in the ordinary course of business or (ii) declared or paid
     any dividend on its capital stock, and, from the date of the Prospectus,
     neither the Company nor any of its subsidiaries has incurred any liability
     other than in the ordinary course of business that is material to the
     Company and its subsidiaries taken as a whole.

          (aa) The Company is in full compliance with Section 13(b)(2) of the
     Exchange Act.

          (bb) Neither the Company nor any of its subsidiaries (i) is in
     violation of its organizational documents, (ii) is in default in any
     material respect, and no event has occurred which, with notice or lapse of
     time or both, would constitute such a default, in the due performance or
     observance of any term, covenant or condition contained in any indenture,
     mortgage, deed of trust, loan agreement or other material agreement or
     instrument to which it is a party or by which it is bound or to which any
     of its properties or assets is subject as a result of which default there
     would be a Material Adverse Effect or (iii) is in violation of any law,
     ordinance, governmental rule, regulation or court decree to which it or its
     property or assets may be subject or has failed to obtain any license,
     permit, certificate, franchise or other governmental authorization or
     permit necessary to the ownership of its property or to the conduct of its
     business which violation or failure would have a Material Adverse Effect.

          (cc) Neither the Company nor any of its subsidiaries is an "investment
     company" or an entity "controlled" by an "investment company" within the
     meaning of the Investment Company Act of 1940, as amended, and the rules
     and regulations of the Commission thereunder.

          7. Indemnification. (a) The Issuers, jointly and severally, agree to
indemnify and hold harmless each Underwriter, each person, if any, who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the directors, officers, employees and agents of each of the
foregoing (collectively, the "Underwriter Indemnified Parties"), from and
against any and all losses, claims, damages, liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue

<PAGE>

                                      -13-

statement or omission or alleged untrue statement or omission based upon
information relating to any Underwriter furnished in writing to the Issuers by
or on behalf of such Underwriter expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter Indemnified Party
asserted by a person with respect to any such losses, claims, damages and
liabilities and judgments, if a copy of the Prospectus (as then amended or
supplemented if the Issuers shall have furnished such amendment or supplement
thereto in the requisite quantity on a timely basis to permit such sending or
giving) was not sent or given by or on behalf of such Underwriter or related
Underwriter Indemnified Party to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of Securities to
such person, and if the Prospectus (as so amended and supplemented) would have
cured the defect giving rise to such loss, claim, damage, liability or judgment.
Notwithstanding anything to the contrary herein, no Underwriter shall be
obligated to send or give any Incorporated Document, or any amendment or
supplement thereto, to any person in order to benefit from the indemnity
provisions herein or otherwise. The foregoing indemnity agreement shall be in
addition to any liability that the Issuers may otherwise have.

          (b) The Issuers, jointly and severally, also agree to indemnify and
hold harmless Banc One and its Underwriter Indemnified Parties, from and against
any and all losses, claims, damages, liabilities and judgments incurred as a
result of Banc One's participation as the QIU in the offering of the Notes;
provided, however, that the Issuers shall not be liable under the foregoing
indemnity to the extent that any loss, claim, damage, liability or judgment
results from the gross negligence or willful misconduct of the QIU.

          (c) In case any action shall be brought against any Underwriter
Indemnified Party, based upon any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment or supplement thereto and with
respect to which indemnity may be sought against the Issuers, the Underwriters
shall promptly notify the Issuers in writing and the Issuers shall assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses. Such Underwriter
Indemnified Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter Indemnified Party unless (i)
the employment of such counsel shall have been specifically authorized in
writing by the Issuers, (ii) the Issuers shall have failed to assume the defense
and employ counsel or (iii) the named parties to any such action (including any
impleaded parties) include both such Underwriter Indemnified Party and the
Issuers and such Underwriter Indemnified Party shall have been advised by such
counsel that there may be one or more legal defenses available to it which are
different from or additional to those available to the Issuers (in which case
the Issuers shall not have the right to assume the defense of such action on
behalf of such Underwriter Indemnified Party, it being understood, however, that
the Issuers shall not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm

<PAGE>

                                      -14-

of attorneys (in addition to any local counsel) for all such Underwriter
Indemnified Parties, which firm shall be designated in writing by Banc of
America and that all such fees and expenses shall be reimbursed as they are
incurred). The Issuers shall not be liable for any settlement of any such action
effected without the Company's written consent but if settled with the written
consent of the Company, the Issuers agree to indemnify and hold harmless the
Underwriter Indemnified Parties from and against any loss or liability by reason
of such settlement. The Company shall not, without the prior written consent of
the Underwriter Indemnified Parties, effect any settlement of any pending or
threatened proceeding in respect of which any Underwriter Indemnified Party is
or could have been a party and indemnity could have been sought hereunder by
such Underwriter Indemnified Party, unless such settlement includes an
unconditional release of such Underwriter Indemnified Party from all liability
on claims that are the subject matter of such proceeding.

          (d) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Issuers, their directors, their officers who sign the
Registration Statement and any person controlling the Issuers within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act, to the same extent
as the foregoing indemnity from the Issuers to the Underwriter Indemnified
Parties but only with reference to information relating to such Underwriter
furnished in writing by or on behalf of such Underwriter expressly for use in
the Registration Statement, the Prospectus or any preliminary prospectus. In
case any action shall be brought against the Issuers, any of its directors, any
such officer or any person controlling the Issuers based on the Registration
Statement, the Prospectus or any preliminary prospectus and in respect of which
indemnity may be sought against any Underwriter, such Underwriter shall have the
rights and duties given to the Issuers (except that if the Issuers shall have
assumed the defense thereof, such Underwriter shall not be required to do so,
but may employ separate counsel therein and participate in the defense thereof
but the fees and expenses of such counsel shall be at the expense of such
Underwriter), and the Issuers, their directors, any such officers and any person
controlling the Issuers shall have the rights and duties given to the
Underwriters, by Section 7(c) hereof.

          (e) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party in respect
of any losses, claims, damages, liabilities or judgments referred to therein,
then each indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers on the one hand and the Underwriters on the other hand from the offering
of the Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Issuers and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages, liabilities or
judgments, as well as any other relevant equitable considerations. The relative
benefits received by the Issuers and the Underwriters shall be deemed to be in
the same proportion as the total net proceeds from the

<PAGE>

                                      -15-

offering (before deducting expenses) received by the Company, and the
compensation received by the Underwriters (based on discount to investors on
resale), bear to the sum of such total net proceeds and such compensation. The
relative fault of the Issuers and the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission to state a material fact relates to
information supplied by the Issuers or any Underwriter and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.

          The Issuers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7(e) were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, the Underwriters shall not be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which the
Underwriters have otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

          (f) The Underwriters confirm and the Issuers acknowledge that the
statements with respect to the public offering of the Securities by the
Underwriters set forth in the third and fourth paragraphs of the section
entitled "Underwriting" in the Prospectus Supplement are correct and constitute
the only information concerning the Underwriters furnished in writing to the
Issuers by or on behalf of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.

          8.  Conditions of Underwriters' Obligation. The obligation of the
Underwriters to purchase the Securities under this Agreement is subject to the
satisfaction of each of the following conditions:

          (a) All the representations and warranties of the Issuers contained in
     this Agreement shall be true and correct on the Closing Date with the same
     force and effect as if made on and as of the Closing Date. The Issuers
     shall have performed or complied with all of their agreements herein
     contained and required to be performed or complied with by them at or prior
     to the Closing Date.

          (b) No stop order suspending the effectiveness of the Registration
     Statement shall have been issued and no proceedings for that purpose shall
     have been

<PAGE>

                                      -16-

     commenced or shall be pending before or threatened by the Commission, (ii)
     every request for additional information on the part of the Commission
     shall have been complied with in all material respects, and (iii) no stop
     order suspending the sale of the Securities in any jurisdiction referred to
     in Section 6(g) shall have been issued and no proceeding for that purpose
     shall have been commenced or shall be pending or threatened which would, in
     your reasonable judgment, make it impracticable or inadvisable to market
     the Securities or to enforce contracts for the sale of the Securities.

          (c) Subsequent to the execution and delivery of this Agreement and
     prior to the Closing Date, there shall not have been any downgrading, nor
     shall any notice have been given of any intended or potential downgrading
     or of any review for a possible change that does not indicate the direction
     of the possible change, in the rating accorded any Issuer's debt by any
     "nationally recognized statistical rating organization," as such term is
     defined for purposes of Rule 436(g)(2) under the Act.

          (d) (i) Since the date of the latest balance sheet included in the
     Registration Statement and the Prospectus, there shall not have been any
     material adverse change, or any development involving a prospective
     material adverse change, in the condition, financial or otherwise, or in
     the earnings, affairs or business prospects, whether or not arising in the
     ordinary course of business, of the Company and its subsidiaries taken as a
     whole, (ii) since the date of the latest balance sheet included in the
     Registration Statement and the Prospectus there shall not have been any
     material change in the capital stock or in the long-term debt of the
     Company or any of its subsidiaries from that set forth in the Registration
     Statement and Prospectus and (iii) the Company and its subsidiaries shall
     have no liability or obligation, direct or contingent, which is material to
     the Company and its subsidiaries, taken as a whole, other than those
     reflected in the Registration Statement and the Prospectus.

          (e) You shall have received on the Closing Date a certificate dated
     the Closing Date, signed by (i) Donald R. Horton or Donald J. Tomnitz and
     (ii) Samuel R. Fuller, in their capacities as (A) the Chairman of the Board
     or Chief Executive Officer and President and (B) Chief Financial Officer of
     the Company, respectively, confirming the matters set forth in paragraphs
     (a), (b), (c) and (d) of this Section 8.

          (f) You shall have received on the Closing Date an opinion
     (satisfactory to you and counsel for the Underwriter), dated the Closing
     Date, of Gibson Dunn & Crutcher LLP, special counsel for the Company, to
     the effect that:

               (i) The Company is validly existing as a corporation in good
          standing under the laws of the State of Delaware and has all corporate
          power and authority necessary to execute, deliver and perform its
          obligations under the Underwriting Agreement, the Indenture and the
          Notes. Each of the Guarantors that are organized under the laws of the
          States of California, Colorado, Delaware,

<PAGE>

                                      -17-

          Nevada and Texas (the "Specified Guarantors") that is a corporation is
          validly existing as a corporation in good standing under the laws of
          its state of incorporation and has all corporate power and authority
          necessary to execute, deliver and perform its obligations under the
          Underwriting Agreement, the Indenture and the Guarantees. Each
          Specified Guarantor that is a limited liability company or a limited
          partnership is validly existing as a limited liability company or a
          limited partnership, as the case may be, under the laws of its state
          of its formation and has all limited liability company or partnership
          power and authority necessary to execute, deliver and perform its
          obligations under the Underwriting Agreement, the Indenture and the
          Guarantees.

               (ii)  To such counsel's knowledge and other than as described in
          the Prospectus, there are no legal or governmental proceedings pending
          to which the Company or any of its subsidiaries is a party or of which
          any property or assets of the Company or any of its subsidiaries is
          the subject which is of a character which is required to be disclosed
          in the Prospectus; and, to such counsel's knowledge, no such
          proceedings are threatened by governmental authorities or by others.

               (iii) The Registration Statement was declared effective under the
          Act as of the date and time specified in such opinion, the Prospectus
          was filed with the Commission pursuant to the subparagraph of Rule
          424(b) under the Act on the date specified therein, and, to such
          counsel's knowledge, no stop order suspending the effectiveness of the
          Registration Statement has been issued and no proceeding for that
          purpose is pending or threatened by the Commission.

               (iv)  The Registration Statement and the Prospectus and any
          further amendments or supplements thereto made by the Company prior to
          the Closing Date (other than the financial data (and the related notes
          thereto) and statistical data and the financial statements and related
          schedules therein, as to which such counsel need express no opinion)
          appear on their face to comply as to form in all material respects
          with the requirements of the Act; the documents incorporated by
          reference in the Prospectus and any further amendment or supplement to
          any such incorporated document made by the Company prior to the
          Closing Date (other than the financial data (and the related notes
          thereto) and statistical data and the financial statements, and
          related schedules therein, as to which such counsel need express no
          opinion), when they were filed with the Commission appear on their
          face to have been appropriately responsive in all material respects to
          the requirements of the Act and the Exchange Act.

               (v)   To such counsel's knowledge, there are no contracts or
          other documents which are required to be described in the Prospectus
          or filed as exhibits to the Registration Statement by the Act which
          have not been described

<PAGE>

                                      -18-

          in the Prospectus or filed as exhibits to the Registration Statement
          or incorporated therein by reference as permitted by the Act.

               (vi)   This Agreement has been duly authorized, executed and
          delivered by the Issuers.

               (vii)  The execution and delivery of the Underwriting Agreement,
          the issuance and sale of the Securities and the execution, delivery
          and performance of the Indenture and the Securities by the Issuers
          will not result in a material breach or violation of any of the terms
          or provisions of, or constitute a material default under, any
          indenture, mortgage, deed of trust, loan agreement or other material
          agreement or instrument listed as an exhibit to the Company's Annual
          Report on Form 10-K for the fiscal year ended September 30, 2001 or to
          any subsequent filing under the Exchange Act or the Act by the
          Company, nor will such actions result in any violation of the
          provisions of the articles or certificates of incorporation, bylaws,
          limited liability company agreement, limited partnership agreement,
          operating agreement or other constitutive document of the Company or
          any Specified Guarantor under any Applicable Law (as defined below) or
          any order, judgment or decree known to us under any court or
          government agency or body of the United States of America or the
          States of New York, California or Texas having jurisdiction over the
          Company or any Specified Guarantor or any of its property or assets
          under any Applicable Law.

                      For the purposes of this Section 8(f)(vii), the term
          "Applicable Law" shall mean the Delaware General Corporation Law, the
          Delaware Limited Liability Company Act and the Delaware Revised
          Uniform Limited Partnership Act, the Nevada General Corporation Law,
          the present corporation, partnership and limited liability company
          statutes of the States of California, Texas and Colorado, any of the
          present laws of the United States of America, any of the present laws
          of the State of New York, the statutes, rules or regulations of the
          State of California and Texas, in each case generally applicable to
          transactions in the nature of those contemplated by the Underwriting
          Agreement and the Indenture, and to present judicial interpretations
          thereto and to the facts as they presently exist.

               (viii) The Indenture has been duly authorized, executed and
          delivered by the Company and the Specified Guarantors and is a valid
          and binding agreement of the Company and the Guarantors, enforceable
          against the Company and the Guarantors in accordance with its terms.

               (xi)   The Notes have been duly authorized and executed by the
          Company and, when authenticated in accordance with the provisions of
          the Indenture and delivered to the Underwriters against payment
          therefor as provided by

<PAGE>

                                      -19-

          the this Agreement, will be entitled to the benefits of the Indenture,
          and will be valid and binding obligations of the Company, enforceable
          against the Company in accordance with their terms.

               (x)   The Guarantees have been duly authorized and endorsed on
          the Notes by the Guarantors, and, upon authentication of the Notes in
          accordance with the provisions of the Indenture and delivery thereof
          to the Underwriters against payment therefor as provided by this
          Agreement, will be entitled to the benefits of the Indenture, and will
          be valid and binding obligations of the Guarantors, enforceable
          against the Guarantors in accordance with their terms.

               (xi)  The Securities and the Indenture conform in all material
          respects to the descriptions thereof in the Prospectus.

               (xii) The Supplemental Indenture is (x) authorized and permitted
          by the Indenture, (y) not inconsistent with the Indenture and (z)
          valid and binding upon the Issuers an accordance with its terms.

          In rendering such opinion, such counsel may state that its opinion is
limited to the Federal laws of the United States of America, the laws of the
States of Texas and New York and the General Corporation Law of the State of
Delaware. Such counsel shall also have furnished to the Underwriters a written
statement, addressed to the Underwriters and dated the Closing Date, in form and
substance satisfactory to the Underwriters and counsel for the Underwriters, to
the effect that (x) such counsel has acted as special counsel to the Company in
connection with the preparation of the Registration Statement and during the
course of the preparation of the Registration Statement and Prospectus, such
counsel participated in conferences with representatives of the Company, the
Company's internal counsel, and its accountants and the representatives of the
Underwriters and at which conferences the contents of the Registration Statement
and the Prospectus and related matters were discussed, and (y) based on the
foregoing, no facts have come to the attention of such counsel which lead it to
believe that (I) the Registration Statement (except as to financial data (and
related notes thereto) and statistical data and the financial statements and
related schedules contained or incorporated by reference therein), as of the
date the Registration Statement became effective, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary in order to make the statements therein not misleading, or
that the Prospectus (except as to financial data (and related notes thereto) and
statistical data and the financial statements and related schedules contained or
incorporated by reference therein) contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading or (II) any Incorporated Document or
any amendment or supplement thereto made by the Company prior to such Closing
Date, when they were filed with the Commission, as the case may be, contained
(except as to financial and data (and related notes thereto) and statistical
data and the financial statements and related

<PAGE>

                                      -20-

schedules contained or incorporated by reference therein) an untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The foregoing opinion and statement may be qualified by a
statement to the effect that such counsel has not independ ently verified the
accuracy, completeness or fairness of the statements contained in the
Registration Statement or Prospectus or incorporated by reference therein, and
such counsel is not passing upon and such counsel does not assume any
responsibility for the accuracy, completeness or fairness of the statements
contained in the Registration Statement or the Prospectus.

          (g) You shall have received on the Closing Date an opinion, dated the
     Closing Date, of Cahill Gordon and Reindel, counsel for the Underwriter, in
     form and substance satisfactory to the Underwriters.

          (h) You shall have received a letter on and as of the Closing Date, in
     form and substance satisfactory to you, from Ernst & Young, LLP,
     independent public accountants, with respect to the financial statements
     and certain financial information contained in the Registration Statement
     and the Prospectus and substantially in the form and substance of the
     letter delivered to you by Ernst & Young, LLP, on the date of this
     Agreement.

          (i) (i) Neither the Company nor any of its subsidiaries shall have
     sustained since the date of the latest audited financial statements in the
     Prospectus any loss or interference with its business from fire, explosion,
     flood or other calamity, whether or not covered by insurance, or from any
     labor dispute or court or governmental action, order or decree, otherwise
     than as set forth or contemplated in the Prospectus or (ii) since such date
     there shall not have been any change in the capital stock, net revenues,
     per share or total amounts of income before extraordinary income or of net
     income or long-term debt of the Company or any of its subsidiaries or any
     change, or any development involving a prospective change, in or affecting
     the general affairs, management, financial position, stockholders' equity
     or results of operations of the Company and its subsidiaries, otherwise
     than as set forth or contemplated in the Prospectus, the effect of which,
     in any such case described in clause (i) or (ii), is, in the judgment of
     the Underwriters, so material and adverse as to make it impracticable or
     inadvisable to proceed with the public offering or the delivery of the
     Securities being delivered on the Closing Date on the terms and in the
     manner contemplated in the Prospectus.

          (j) The Issuers shall have furnished to you such other documents and
     certificates as to the accuracy and completeness of any statement in the
     Registration Statement or the Prospectus as you reasonably may request.

<PAGE>

                                      -21-

          (k) You shall have been furnished with such additional documents and
     certificates as you or counsel for the Underwriters may reasonably request.

          All such opinions, certificates, letters and other documents will be
in compliance with the provisions hereof only if they are reasonably
satisfactory in form and substance to you and your counsel.

          Any certificate or document signed by any officer of the Issuers and
delivered to you or to your counsel shall be deemed a representation and
warranty by the Issuers to the Underwriters as to the statements made therein.

          9.  Default by an Underwriter. If any one Underwriter shall fail to
purchase and pay for any of the Notes agreed to be purchased by such Underwriter
hereunder and such failure to purchase shall constitute a default in the
performance of its or their obligations under this Agreement, the remaining
Underwriters shall be obligated severally to take up and pay for (in the
respective proportions which the principal amount of Notes set forth opposite
their names in Schedule A hereto bears to the aggregate principal amount of
Notes set forth opposite the names of all the remaining Underwriters) the Notes
which the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the aggregate principal amount of
Notes which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate principal amount of Notes set forth
in Schedule A hereto, the remaining Underwriters shall have the right to
purchase all, but shall not be under any obligation to purchase any, of the
Notes, and if such non-defaulting Underwriters do not purchase all the Notes,
this Agreement will terminate without liability to any non-defaulting
Underwriter or the Company. In the event of a default by any Underwriter as set
forth in this Section 9, the Closing Date shall be postponed for such period,
not exceeding five business days, as Banc of America shall determine in order
that the required changes in the Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company or any
non-defaulting Underwriter for damages occasioned by its default hereunder.

          10. Termination.

          This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Issuers if any of the following has occurred:
(i) since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change or
development involving a prospective material adverse change in the condition,
financial or otherwise, of the Company and its subsidiaries or the earnings,
affairs, or business prospects of the Company and its subsidiaries taken as a
whole, whether or not arising in the ordinary course of business, which would,
in your judgment, make it impracticable to market the Securities on the terms
and in the manner contemplated in the Prospectus, (ii) any outbreak or
escalation of hostilities or other national or international calamity or crisis
or change in economic conditions or in the financial markets of the United
States or

<PAGE>

                                      -22-

elsewhere that, in your judgment, is material and adverse and would, in your
judgment, make it impracticable to market the Securities on the terms and in the
manner contemplated in the Prospectus, (iii) the suspension or material
limitation of trading in securities on the New York Stock Exchange, the American
Stock Exchange or the Nasdaq National Market or limitation on prices for
securities on any such exchange, (iv) the enactment, publication, decree or
other promulgation of any federal or state statute, regulation, rule or order of
any court or other governmental authority which in your opinion materially and
adversely affects, or will materially and ad versely affect, the business or
operations of the Company and its subsidiaries taken as a whole, (v) the
declaration of a banking moratorium by either federal or New York State
authorities or (vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs which in your
opinion has a material adverse effect on the financial markets in the United
States.

          11. Miscellaneous. Notices given pursuant to any provision of this
Agreement shall be addressed as follows: (a) if to the Issuers, to D.R. Horton,
Inc., 1901 Ascension Blvd., Suite 100, Arlington, Texas 76006, Attention: Chief
Financial Officer and (b) if to the Underwriters, to c/o Banc of America
Securities LLC, 9 West 57th Street, New York, New York 10019, Attention: Legal
Department, or in any case to such other address as the person to be notified
may have requested in writing.

          The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, its officers and directors (in
their capacities as such) and of the Underwriters set forth in or made pursuant
to this Agreement shall remain operative and in full force and effect, and will
survive delivery of and payment for the Securities, regardless of (i) any
investigation, or statement as to the results thereof, made by or on behalf of
the Underwriters or by or on behalf of the Company, the officers or directors of
the Company or any controlling person of the Company (in their capacities as
such), (ii) acceptance of the Securities and payment for them hereunder and
(iii) termination of this Agreement.

          If this Agreement shall be terminated by the Underwriters because of
any failure or refusal on the part of any Issuer to perform any of its
agreements in this Agreement or to fulfill any of the conditions of Section 8 of
this Agreement, the Issuers, jointly and severally, agree to reimburse the
Underwriters for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by it.

          Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Issuers, the
Underwriters, any controlling persons referred to herein, the other indemnitees
referred to herein and their respective successors and assigns, all as and to
the extent provided in this Agreement, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include a purchaser of any of the Securities from any
Underwriter merely because of such purchase.

<PAGE>

                                      -23-

          This Agreement shall be governed and construed in accordance with the
laws of the State of New York.

          This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.

          References herein to "your judgment" or "your opinion" shall be deemed
to be the judgment or opinion, as the case may be, of Banc of America only.


                            [Signature Pages Follow]

<PAGE>


     Please confirm that the foregoing correctly sets forth the agreement
between the Issuers and the Underwriters.

                               Very truly yours,

                               D.R. HORTON, INC.


                               By: /s/ Samuel R. Fuller
                                   ---------------------------------------------
                                       Samuel R. Fuller
                                       Executive Vice President, Treasurer and
                                       Chief Financial Officer

                                      S-1

<PAGE>

                        GUARANTORS:

                        C. RICHARD DOBSON BUILDERS, INC.
                        CHI CONSTRUCTION COMPANY
                        CHTEX OF TEXAS, INC.
                        CONTINENTAL HOMES, INC.
                        CONTINENTAL HOMES OF FLORIDA, INC.
                        CONTINENTAL RESIDENTIAL, INC.
                        D.R. HORTON, INC. - BIRMINGHAM
                        D.R. HORTON, INC. - CHICAGO
                        D.R. HORTON, INC. - DENVER
                        D.R. HORTON, INC. - DIETZ-CRANE
                        D.R. HORTON, INC. - GREENSBORO
                        D.R. HORTON, INC. - JACKSONVILLE
                        D.R. HORTON, INC. - LOUISVILLE
                        D.R. HORTON, INC. - MINNESOTA
                        D.R. HORTON, INC. - NEW JERSEY
                        D.R. HORTON, INC. - PORTLAND
                        D.R. HORTON, INC. - SACRAMENTO
                        D.R. HORTON, INC. - TORREY
                        D.R. HORTON LOS ANGELES HOLDING COMPANY, INC.
                        D.R. HORTON SAN DIEGO HOLDING COMPANY, INC.
                        DRH CAMBRIDGE HOMES, INC.
                        DRH CONSTRUCTION, INC.
                        DRH REGREM III, INC.
                        DRH REGREM IV, INC.
                        DRH REGREM V, INC.
                        DRH SOUTHWEST CONSTRUCTION, INC.
                        DRH TITLE COMPANY OF COLORADO, INC.
                        DRH TUCSON CONSTRUCTION, INC.
                        DRHI, INC.
                        KDB HOMES, INC.
                        MEADOWS I, LTD.
                        MEADOWS VIII, LTD.
                        MEADOWS IX, INC.
                        MEADOWS X, INC.
                        THE CLUB AT PRADERA, INC. (formerly DRH REGREM II, INC.)

                        By:  /s/ Samuel R. Fuller
                            ----------------------------------------------------
                             Samuel R. Fuller
                             Treasurer

                                      S-3

<PAGE>

                          CH INVESTMENTS OF TEXAS, INC.
                          MEADOWS II, LTD.

                          By: /s/ William Peck
                             -------------------------------------------
                                  William Peck
                                  President

                                      S-4

<PAGE>

                CONTINENTAL HOMES OF TEXAS, L.P.

                By: CHTEX of Texas, Inc., its general partner

                      By:  /s/ Samuel R. Fuller
                          ------------------------------------------
                              Samuel R. Fuller, Treasurer

                D.R. HORTON MANAGEMENT COMPANY, LTD.
                D.R. HORTON - EMERALD, LTD.
                D.R. HORTON - TEXAS, LTD.
                DRH REGREM VII, LP

                By: Meadows I, Ltd., its general partner


                      By:  /s/ Samuel R. Fuller
                          ------------------------------------------
                              Samuel R. Fuller, Treasurer

                SGS COMMUNITIES AT GRANDE QUAY, LLC

                By: Meadows IX, Inc., a member

                      By:  /s/ Samuel R. Fuller
                          ------------------------------------------
                              Samuel R. Fuller, Treasurer

                and

                By: Meadows X, Inc., a member

                      By:  /s/ Samuel R. Fuller
                          ------------------------------------------
                              Samuel R. Fuller, Treasurer

                DRH CAMBRIDGE HOMES, LLC
                DRH REGREM VIII, LLC

                By: D.R. Horton, Inc. - Chicago, a member

                      By:  /s/ Samuel R. Fuller
                          ------------------------------------------
                              Samuel R. Fuller
                              Treasurer

                                      S-5

<PAGE>

                           ALLEGRA, LLC
                           APLAM, LLC
                           WESTERN PACIFIC HOUSING CO.
                           WESTERN PACIFIC HOUSING-ANTIGUA, LLC
                           WESTERN PACIFIC HOUSING-AVIARA, L.P.
                           WESTERN PACIFIC HOUSING-BOARDWALK, LLC
                           WESTERN PACIFIC HOUSING-BROADWAY, LLC
                           WESTERN PACIFIC HOUSING-CANYON PARK, LLC
                           WESTERN PACIFIC HOUSING-CARMEL, LLC
                           WESTERN PACIFIC HOUSING-CARRILLO, LLC
                           WESTERN PACIFIC HOUSING-COMMUNICATIONS HILL, LLC
                           WESTERN PACIFIC HOUSING-CREEKSIDE, LLC
                           WESTERN PACIFIC HOUSING-CULVER CITY, L.P.
                           WESTERN PACIFIC HOUSING-LOMAS VERDES, LLC
                           WESTERN PACIFIC HOUSING-LOST HILLS PARK, LLC
                           WESTERN PACIFIC HOUSING-MCGONIGLE CANYON, LLC
                           WESTERN PACIFIC HOUSING-MOUNTAINGATE, L.P.
                           WESTERN PACIFIC HOUSING-NORCO ESTATES, LLC
                           WESTERN PACIFIC HOUSING-OSO, L.P.
                           WESTERN PACIFIC HOUSING-PARK AVENUE EAST, LLC
                           WESTERN PACIFIC HOUSING-PARK AVENUE WEST, LLC
                           WESTERN PACIFIC HOUSING-PLAYA VISTA, LLC
                           WESTERN PACIFIC HOUSING-ROBINHOOD RIDGE, LLC
                           WESTERN PACIFIC HOUSING-SANTA FE, LLC
                           WESTERN PACIFIC HOUSING-SCRIPPS II, LLC
                           WESTERN PACIFIC HOUSING-SCRIPPS, L.P.
                           WESTERN PACIFIC HOUSING-SEACOVE, L.P.
                           WESTERN PACIFIC HOUSING-STUDIO 528, LLC
                           WESTERN PACIFIC HOUSING-TERRA BAY DUETS, LLC
                           WESTERN PACIFIC HOUSING-TORRANCE, LLC
                           WESTERN PACIFIC HOUSING-TORREY COMMERCIAL, LLC
                           WESTERN PACIFIC HOUSING-TORREY MEADOWS, LLC
                           WESTERN PACIFIC HOUSING-TORREY MULTI-FAMILY, LLC
                           WESTERN PACIFIC HOUSING-TORREY VILLAGE CENTER, LLC
                           WESTERN PACIFIC HOUSING-VINEYARD TERRACE, LLC
                           WESTERN PACIFIC HOUSING-WINDEMERE, LLC
                           WESTERN PACIFIC HOUSING-WINDFLOWER, L.P.
                           WPH-CAMINO RUIZ, LLC
                           WPH-HPH, LLC

                           By:      LAMCO Housing, Inc.,
                                    its Member or General Partner

                                    By: /s/ Samuel R. Fuller
                                        ---------------------------------------
                                            Samuel R. Fuller
                                            Vice President


                                      S-6

<PAGE>

                           SCHULER HOMES OF ARIZONA LLC
                           SHA CONSTRUCTION LLC

                           By: SRHI LLC,
                               its Member

                                    By: SLHR of Nevada, Inc.,
                                        its Member

                                        By: /s/ Samuel R. Fuller
                                            -----------------------------
                                            Samuel R. Fuller
                                            Vice President

                           HPH HOMEBUILDERS 2000 L.P.
                           PORTER GP LLC

                           By: WPH-HPH, LLC,
                               its General Partner or Member

                                    By: LAMCO Housing, Inc.,
                                        its Member

                                        By: /s/ Samuel R. Fuller
                                            -----------------------------
                                            Samuel R. Fuller
                                            Vice President

                           AP LHI, INC.
                           AP WESTERN GP CORPORATION
                           AP WP OPERATING CORPORATION
                           LAMCO HOUSING, INC.
                           MELODY HOMES, INC.
                           MELMORT CO.
                           SCHULER HOMES OF CALIFORNIA, INC.
                           SCHULER HOMES OF OREGON, INC.
                           SCHULER HOMES OF WASHINGTON, INC.
                           SCHULER MORTGAGE, INC.
                           SCHULER REALTY HAWAII, INC.
                           SHLR OF CALIFORNIA, INC.
                           SHLR OF COLORADO, INC.
                           SHLR OF NEVADA, INC.
                           SHLR OF UTAH, INC.
                           SHLR OF WASHINGTON, INC.
                           VERTICAL CONSTRUCTION CORPORATION
                           WESTERN PACIFIC FUNDING, INC.
                           WESTERN PACIFIC HOUSING MANAGEMENT, INC.
                           WESTERN PACIFIC HOUSING, INC.


                           By:     /s/ Samuel R. Fuller
                                   --------------------------------------------
                                   Samuel R. Fuller
                                   Vice President


                                      S-7

<PAGE>

                         D.R. HORTON-SCHULER HOMES, LLC

                           By: Vertical Construction Corporation,
                               its Manager

                               By: /s/ Samuel R. Fuller
                                   -----------------------------
                                   Samuel R. Fuller
                                   Vice President


                          SRHI LLC

                           By: SHLR of Nevada, Inc.,
                               its Member

                               By: /s/ Samuel R. Fuller
                                   -----------------------------
                                   Samuel R. Fuller
                                   Vice President


                           SSHI LLC

                           By: SHLR of Washington, Inc.,
                               its Member

                               By: /s/ Samuel R. Fuller
                                   -----------------------------
                                   Samuel R. Fuller
                                   Vice President



                           WESTERN PACIFIC HOUSING-COPPER CANYON, LLC
                           WESTERN PACIFIC HOUSING-PACIFIC PARK II, LLC
                           WESTERN PACIFIC HOUSING-POINSETTIA, L.P.
                           WESTERN PACIFIC HOUSING-DEL VALLE, LLC


                           By: AP Western GP Corporation,
                               its Member or General Partner

                               By: /s/ Samuel R. Fuller
                                   -----------------------------
                                   Samuel R. Fuller
                                   Vice President


                           WESTERN PACIFIC HOUSING-RIVER RIDGE, LLC

                           By: AP LHI, Inc.,
                               its Member

                               By: /s/ Samuel R. Fuller
                                   -----------------------------
                                   Samuel R. Fuller
                                   Vice President


                           AP WP PARTNERS, L.P.

                           By: AP WP Operating Corporation,
                               its General Partner

                               By: /s/ Samuel R. Fuller
                                   -----------------------------
                                   Samuel R. Fuller
                                   Vice President

                                      S-8

<PAGE>


Agreed and accepted as of the
date first written above:


BANC OF AMERICA SECURITIES LLC
WACHOVIA SECURITIES, INC.

By: BANC OF AMERICA SECURITIES LLC

By:  /s/ Adam Goodfriend
     --------------------------------------
     Name: Adam Goodfriend
     Title: Managing Director


BANC ONE CAPITAL MARKETS, INC.

By:    /s/ David H. Schabes
     --------------------------------------
     Name:   David H. Schabes
     Title:  Managing Director

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>4
<FILENAME>dex41.txt
<DESCRIPTION>FIFTEENTH SUPPLEMENTAL INDENTURE
<TEXT>
<PAGE>

                                                                     Exhibit 4.1

================================================================================



                D.R. HORTON, INC. AND THE GUARANTORS PARTY HERETO



                           7.5% Senior Notes due 2007



                             ----------------------

                        Fifteenth Supplemental Indenture

                          Dated as of December 3, 2002

                             ----------------------



                    AMERICAN STOCK TRANSFER & TRUST COMPANY,

                                     Trustee



================================================================================

<PAGE>
<TABLE>
<CAPTION>

                                TABLE OF CONTENTS
                                                                                  Page
                                                                                  ----
<S>                                                                               <C>

                                   ARTICLE ONE

                    Scope of Supplemental Indenture; General

                                   ARTICLE TWO

                               Certain Definitions

                                  ARTICLE THREE

                                    Covenants

Section 3.01.   Repurchase of Notes upon Change of Control .....................    23
Section 3.02.   Limitations on Indebtedness ....................................    23
Section 3.03.   Limitations on Restricted Payments .............................    24
Section 3.04.   Limitations on Transactions with Affiliates ....................    26
Section 3.05.   Limitations on Dispositions of Assets ..........................    27
Section 3.06.   Limitations on Liens ...........................................    28
Section 3.07.   Limitations on Restrictions Affecting Restricted Subsidiaries ..    28
Section 3.08.   Limitations on Mergers, Consolidations and Sales of Assets .....    29
Section 3.09.   Reports to Holders of Notes ....................................    30

                                  ARTICLE FOUR

                                  Miscellaneous

Section 4.01.   Governing Law ..................................................    30
Section 4.02.   No Adverse Interpretation of Other Agreements ..................    31
Section 4.03.   No Recourse Against Others .....................................    31
Section 4.04.   Successors and Assigns .........................................    31
Section 4.05.   Duplicate Originals ............................................    31
Section 4.06.   Severability ...................................................    31
</TABLE>

                                      -i-

<PAGE>

               FIFTEENTH SUPPLEMENTAL INDENTURE dated as of December 3, 2002
("Supplemental Indenture"), to the Indenture dated as of June 9, 1997 (as
amended, modified or supplemented from time to time in accordance therewith, the
"Indenture"), by and among D.R. HORTON, INC., a Delaware corporation (the
"Company"), each of the Guarantors (as defined herein) and AMERICAN STOCK
TRANSFER & TRUST COMPANY, as trustee (the "Trustee").

               Each party agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the holders of Notes (as defined
herein):

               WHEREAS, the Company, the Guarantors and the Trustee have duly
authorized the execution and delivery of the Indenture to provide for the
issuance from time to time of senior debt securities (the "Securities") to be
issued in one or more series as in the Indenture provided;

               WHEREAS, the Company and the Guarantors desire and have requested
the Trustee to join them in the execution and delivery of this Supplemental
Indenture in order to establish and provide for the issuance by the Company of a
series of Securities designated as its 7.5% Senior Notes due 2007, substantially
in the form attached hereto as Exhibit A (the "Notes"), guaranteed by the
Guarantors, on the terms set forth herein;

               WHEREAS, Section 2.01 of the Indenture provides that a
supplemental indenture may be entered into by the Company, the Guarantors and
the Trustee for such purpose provided certain conditions are met;

               WHEREAS, the conditions set forth in the Indenture for the
execution and delivery of this Supplemental Indenture have been complied with;
and

               WHEREAS, all things necessary to make this Supplemental Indenture
a valid agreement of the Company, the Guarantors and the Trustee, in accordance
with its terms, and a valid amendment of, and supplement to, the Indenture have
been done;

               NOW, THEREFORE:

               In consideration of the premises and the purchase and acceptance
of the Notes by the holders thereof the Company and the Guarantors mutually
covenant and agree with the Trustee, for the equal and ratable benefit of the
holders, that the Indenture is supplemented and amended, to the extent expressed
herein, as follows:

                                   ARTICLE ONE

                    Scope of Supplemental Indenture; General

               The changes, modifications and supplements to the Indenture
effected by this Supplemental Indenture shall be applicable only with respect
to, and govern the terms of, the Notes, which shall not be limited in aggregate
principal amount, and shall not apply to any other Securities that may be issued
under the Indenture unless a supplemental

<PAGE>

                                      -2-

indenture with respect to such other Securities specifically incorporates such
changes, modifications and supplements. Pursuant to this Supplemental Indenture,
there is hereby created and designated a series of Securities under the
Indenture entitled "7.5% Senior Notes due 2007." The Notes shall be in the form
of Exhibit A hereto. The Notes shall be guaranteed by the Guarantors as provided
in such form and the Indenture. If required, the Notes may bear an appropriate
legend regarding original issue discount for federal income tax purposes.

                                   ARTICLE TWO

                               Certain Definitions

               The following terms have the meanings set forth below in this
Supplemental Indenture. Capitalized terms used but not defined herein have the
meanings ascribed to such terms in the Indenture. To the extent terms defined
herein differ from the Indenture the terms defined herein will govern.

               "Acquired Indebtedness" means (i) with respect to any Person that
becomes a Restricted Subsidiary (or is merged into the Company or any Restricted
Subsidiary) after the Issue Date, Indebtedness of such Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary
(or is merged into the Company or any Restricted Subsidiary) that was not
incurred in connection with, or in contemplation of, such Person becoming a
Restricted Subsidiary (or being merged into the Company or any Restricted
Subsidiary) and (ii) with respect to the Company or any Restricted Subsidiary,
any Indebtedness expressly assumed by the Company or any Restricted Subsidiary
in connection with the acquisition of any assets from another Person (other than
the Company or any Restricted Subsidiary), which Indebtedness was not incurred
by such other Person in connection with or in contemplation of such acquisition.
Indebtedness incurred in connection with or in contemplation of any transaction
described in clause (i) or (ii) of the preceding sentence shall be deemed to
have been incurred by the Company or a Restricted Subsidiary, as the case may
be, at the time such Person becomes a Restricted Subsidiary (or is merged into
the Company or any Restricted Subsidiary) in the case of clause (i) or at the
time of the acquisition of such assets in the case of clause (ii), but shall not
be deemed Acquired Indebtedness.

               "Affiliate" means, when used with reference to a specified
Person, any Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Person specified.

               "Affiliate Transaction" has the meaning set forth in Section 3.03
hereof.

               "Asset Acquisition" means (i) an Investment by the Company or any
Restricted Subsidiary in any other Person if, as a result of such Investment,
such Person shall become a Restricted Subsidiary or shall be consolidated or
merged with or into the Company or any Restricted Subsidiary or (ii) the
acquisition by the Company or any Restricted Subsidiary of the assets of any
Person, which constitute all or substantially all of

<PAGE>

                                      -3-

the assets or of an operating unit or line of business of such Person or which
is otherwise outside the ordinary course of business.

               "Asset Disposition" means any sale, transfer, conveyance, lease
or other disposition (including, without limitation, by way of merger,
consolidation or sale and leaseback or sale of shares of Capital Stock in any
Subsidiary) (each, a "transaction") by the Company or any Restricted Subsidiary
to any Person of any Property having a fair market value in any transaction or
series of related transactions of at least $10 million. The term "Asset
Disposition" shall not include (i) a transaction between the Company and any
Restricted Subsidiary or a transaction between Restricted Subsidiaries, (ii) a
transaction in the ordinary course of business, including, without limitation,
sales (directly or indirectly), dedications and other donations to governmental
authorities, leases and sales and leasebacks of (A) homes, improved land and
unimproved land and (B) real estate (including related amenities and
improvements), (iii) a transaction involving the sale of Capital Stock of, or
the disposition of assets in, an Unrestricted Subsidiary, (iv) any exchange or
swap of assets of the Company or any Restricted Subsidiary for assets that (x)
are to be used by the Company or any Restricted Subsidiary in the ordinary
course of its Real Estate Business and (y) have a Fair Market Value not less
than the Fair Market Value of the assets exchanged or swapped, (v) any sale,
transfer, conveyance, lease or other disposition of assets and properties of the
Company that is governed by Section 3.08 hereof, or (iv) dispositions of
mortgage loans and related assets and mortgage-backed securities in the ordinary
course of a mortgage lending business.

               "Attributable Debt" means, with respect to any Capitalized Lease
Obligations, the capitalized amount thereof determined in accordance with GAAP.

               "Bankruptcy Law" means title 11 of the United States Code, as
amended, or any similar federal or state law for the relief of debtors.

               "Business Day" means each Monday, Tuesday, Wednesday, Thursday
and Friday which is not a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close.

               "Capital Stock" means, with respect to any Person, any and all
shares, interests, participations or other equivalents (however designated) of
or in such Person's capital stock or other equity interests, and options, rights
or warrants to purchase such capital stock or other equity interests, whether
now outstanding or issued after the Issue Date, including, without limitation,
all Disqualified Stock and Preferred Stock.

               "Capitalized Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of such obligations will be the capitalized amount thereof
determined in accordance with GAAP.

               "Cash Equivalents" means: (a) U.S. dollars; (b) securities issued
or directly and fully guaranteed or insured by the U.S. government or any agency
or instru

<PAGE>

                                      -4-

mentality thereof having maturities of one year or less from the date of
acquisition; (c) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank having capital and
surplus in excess of $500 million; (d) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clauses
(b) and (c) entered into with any financial institution meeting the
qualifications specified in clause (c) above; (e) commercial paper rated P-1,
A-1 or the equivalent thereof by Moody's Investors Service, Inc. or Standard &
Poor's Ratings Group, respectively, and in each case maturing within six months
after the date of acquisition; and (f) investments in money market funds
substantially all of the assets of which consist of securities described in the
foregoing clauses (a) through (e).

               "Change of Control" means (i) any sale, lease or other transfer
(in one transaction or a series of transactions) of all or substantially all of
the consolidated assets of the Company and its Restricted Subsidiaries to any
Person (other than a Restricted Subsidiary); provided, however, that a
transaction where the holders of all classes of Common Equity of the Company
immediately prior to such transaction own, directly or indirectly, more than 50%
of all classes of Common Equity of such Person immediately after such
transaction shall not be a Change of Control; (ii) a "person" or "group" (within
the meaning of Section 13(d) of the Exchange Act (other than (x) the Company or
(y) Donald R. Horton, Terrill J. Horton, or their respective wives, children,
grandchildren and other descendants, or any trust or other entity formed or
controlled by any of such individuals)) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) of Common Equity of the Company
representing more than 50% of the voting power of the Common Equity of the
Company; (iii) Continuing Directors cease to constitute at least a majority of
the Board of Directors of the Company; or (iv) the stockholders of the Company
approve any plan or proposal for the liquidation or dissolution of the Company;
provided, however, that a liquidation or dissolution of the Company which is
part of a transaction that does not constitute a Change of Control under the
proviso contained in clause (i) above shall not constitute a Change of Control.

               "Common Equity" of any Person means Capital Stock of such Person
that is generally entitled to (i) vote in the election of directors of such
Person or (ii) if such Person is not a corporation, vote or otherwise
participate in the selection of the governing body, partners, managers or others
that will control the management or policies of such Person.

               "Consolidated Adjusted Tangible Assets" of the Company as of any
date means the Consolidated Tangible Assets of the Company and the Restricted
Subsidiaries at the end of the fiscal quarter immediately preceding the date
less any assets securing any Non-Recourse Indebtedness, as determined in
accordance with GAAP.

               "Consolidated Cash Flow Available for Fixed Charges" means, for
any period, on a consolidated basis for the Company and the Restricted
Subsidiaries, Consolidated Net Income for such period plus (each to the extent
deducted in calculating such

<PAGE>

                                      -5-

Consolidated Net Income and determined in accordance with GAAP) (a) the sum for
such period, without duplication, of (i) income taxes, (ii) Consolidated
Interest Expense, (iii) depreciation and amortization expenses and other
non-cash charges to earnings and (iv) interest and financing fees and expenses
which were previously capitalized and which are amortized to cost of sales,
minus (b) all other non-cash items (other than the receipt of notes receivable)
increasing such Consolidated Net Income.

               "Consolidated Fixed Charge Coverage Ratio" means, with respect to
any determination date, the ratio of (x) Consolidated Cash Flow Available for
Fixed Charges for the prior four full fiscal quarters (the "Four Quarter
Period") for which financial results have been reported immediately preceding
the determination date (the "Transaction Date"), to (y) the aggregate
Consolidated Interest Incurred for the Four Quarter Period. For purposes of this
definition, "Consolidated Cash Flow Available for Fixed Charges" and
"Consolidated Interest Incurred" shall be calculated after giving effect on a
pro forma basis for the period of such calculation to (i) the incurrence or the
repayment, repurchase, defeasance or other discharge or the assumption by
another Person that is not an Affiliate (collectively, "repayment") of any
Indebtedness of the Company or any Restricted Subsidiary (and the application of
the proceeds thereof) giving rise to the need to make such calculation, and any
incurrence or repayment of other Indebtedness (and the application of the
proceeds thereof), at any time on or after the first day of the Four Quarter
Period and on or prior to the Transaction Date, as if such incurrence or
repayment, as the case may be (and the application of the proceeds thereof),
occurred on the first day of the Four Quarter Period, except that Indebtedness
under revolving credit facilities shall be deemed to be the average daily
balance of such Indebtedness during the Four Quarter Period (as reduced on such
pro forma basis by the application of any proceeds of the incurrence of
Indebtedness giving rise to the need to make such calculation); (ii) any Asset
Disposition or Asset Acquisition (including, without limitation, any Asset
Acquisition giving rise to the need to make such calculation as a result of the
Company or any Restricted Subsidiary (including any Person that becomes a
Restricted Subsidiary as a result of any such Asset Acquisition) incurring
Acquired Indebtedness at any time on or after the first day of the Four Quarter
Period and on or prior to the Transaction Date), as if such Asset Disposition or
Asset Acquisition (including the incurrence or repayment of any such
Indebtedness) and the inclusion, notwithstanding clause (ii) of the definition
of "Consolidated Net Income," of any Consolidated Cash Flow Available for Fixed
Charges associated with such Asset Acquisition as if it occurred on the first
day of the Four Quarter Period; provided, however, that the Consolidated Cash
Flow Available for Fixed Charges associated with any Asset Acquisition shall not
be included to the extent the net income so associated would be excluded
pursuant to the definition of "Consolidated Net Income," other than clause (ii)
thereof, as if it applied to the Person or assets involved before they were
acquired; and (iii) the Consolidated Cash Flow Available for Fixed Charges and
the Consolidated Interest Incurred attributable to discontinued operations, as
determined in accordance with GAAP, shall be excluded. Furthermore, in
calculating "Consolidated Cash Flow Available for Fixed Charges" for purposes of
determining the denominator (but not the numerator) of this "Consolidated Fixed
Charge Coverage Ratio," (1) interest on Indebtedness in respect of which a pro
forma calculation is required that is determined on a

<PAGE>

                                       -6-

fluctuating basis as of the Transaction Date (including Indebtedness actually
incurred on the Transaction Date) and which will continue to be so determined
thereafter shall be deemed to have accrued at a fixed rate per annum equal to
the rate of interest on such Indebtedness in effect on the Transaction Date; and
(2) notwithstanding clause (1) above, interest on such Indebtedness determined
on a fluctuating basis, to the extent such interest is covered by agreements
relating to Interest Protection Agreements, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.

               "Consolidated Interest Expense" of the Company for any period
means the Interest Expense of the Company and the Restricted Subsidiaries for
such period, determined on a consolidated basis in accordance with GAAP.

               "Consolidated Interest Incurred" for any period means the
Interest Incurred of the Company and the Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP.

               "Consolidated Net Income" for any period means the aggregate net
income (or loss) of the Company and its Subsidiaries for such period, determined
on a consolidated basis in accordance with GAAP; provided that there will be
excluded from such net income (loss) (to the extent otherwise included therein),
without duplication: (i) the net income (or loss) of (x) any Unrestricted
Subsidiary (other than a Mortgage Subsidiary) or (y) any Person (other than a
Restricted Subsidiary) in which any Person other than the Company or any
Restricted Subsidiary has an ownership interest, except, in each case, to the
extent that any such income has actually been received by the Company or any
Restricted Subsidiary in the form of cash dividends or similar cash
distributions during such period, which dividends or distributions are not in
excess of the Company's or such Restricted Subsidiary's (as applicable) pro rata
share of such Unrestricted Subsidiary's or such other Person's net income earned
during such period, (ii) except to the extent includable in Consolidated Net
Income pursuant to the foregoing clause (i), the net income (or loss) of any
Person that accrued prior to the date that (a) such Person becomes a Restricted
Subsidiary or is merged with or into or consolidated with the Company or any of
its Restricted Subsidiaries (except, in the case of an Unrestricted Subsidiary
that is redesignated a Restricted Subsidiary during such period, to the extent
of its retained earnings from the beginning of such period to the date of such
redesignation) or (b) the assets of such Person are acquired by the Company or
any Restricted Subsidiary, (iii) the net income of any Restricted Subsidiary to
the extent that (but only so long as) the declaration or payment of dividends or
similar distributions by such Restricted Subsidiary of that income is not
permitted by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable to
that Restricted Subsidiary during such period, (iv) the gains or losses,
together with any related provision for taxes, realized during such period by
the Company or any Restricted Subsidiary resulting from (a) the acquisition of
securities, or extinguishment of Indebtedness, of the Company or any Restricted
Subsidiary or (b) any Asset Disposition by the Company or any Restricted
Subsidiary, (v) any extraordinary gain or loss together with any related
provision for taxes, realized by the Company or any Restricted Subsidiary and

<PAGE>

                                      -7-

(vi) any non-recurring expense recorded by the Company or any Restricted
Subsidiary in connection with a merger accounted for as a "pooling-of-interests"
transaction; provided, further, that for purposes of calculating Consolidated
Net Income solely as it relates to clause (iii) of Section 3.03(a) hereof,
clause (iv)(b) above shall not be applicable.

               "Consolidated Net Worth" of any Person as of any date means the
stockholders' equity (including any Preferred Stock that is classified as equity
under GAAP, other than Disqualified Stock) of such Person and its Restricted
Subsidiaries on a consolidated basis at the end of the fiscal quarter
immediately preceding such date, as determined in accordance with GAAP, less any
amount attributable to Unrestricted Subsidiaries.

               "Consolidated Tangible Assets" of the Company as of any date
means the total amount of assets of the Company and its Restricted Subsidiaries
(less applicable reserves) on a consolidated basis at the end of the fiscal
quarter immediately preceding such date, as determined in accordance with GAAP,
less: (i) Intangible Assets and (ii) appropriate adjustments on account of
minority interests of other Persons holding equity investments in Restricted
Subsidiaries.

               "Continuing Director" means a director who either was a member of
the Board of Directors of the Company on the Issue Date or who became a director
of the Company subsequent to such date and whose election, or nomination for
election by the Company's stockholders, was duly approved by a majority of the
Continuing Directors on the Board of Directors of the Company at the time of
such approval, either by a specific vote or by approval of the proxy statement
issued by the Company on behalf of the entire Board of Directors of the Company
in which such individual is named as nominee for director.

               "control", when used with respect to any Person, means the power
to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.

               "Credit Facilities" means, collectively, each of the credit
facilities of the Company or one or more Restricted Subsidiaries in existence on
the Issue Date and one or more other facilities among or between the Company or
one or more Restricted Subsidiaries and one or more lenders pursuant to which
the Company or any Restricted Subsidiary may incur indebtedness for working
capital and general corporate purposes (including acquisitions), as any such
facility or line of credit may amended, restated, supplemented or otherwise
modified from time to time, and includes any agreement extending the maturity
of, increasing the amount of, or restructuring, all or any portion of the
Indebtedness under any such facility or line of credit or any successor
facilities or lines of credit and includes any facility or line of credit with
one or more lenders refinancing or replacing all or any portion of the
Indebtedness under such facility or line of credit or any successor facility or
line of credit.

<PAGE>

                                      -8-

               "Currency Agreement" of any Person means any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect such Person or any of its Subsidiaries against fluctuations
in currency values.

               "Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.

               "Default" means any event, act or condition that is, or after
notice or the passage of time or both would be, an Event of Default.

               "Designation Amount" has the meaning provided in the definition
of Unrestricted Subsidiary.

               "Disqualified Stock" means any Capital Stock that, by its terms
(or by the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, (i) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final maturity date of the Notes or (ii) is convertible into or exchangeable or
exercisable for (whether at the option of the issuer or the holder thereof) (a)
debt securities or (b) any Capital Stock referred to in (i) above, in each case,
at any time prior to the final maturity date of the Notes provided, however,
that any Capital Stock that would not constitute Disqualified Stock but for
provisions thereof giving holders thereof (or the holders of any security into
or for which such Capital Stock is convertible, exchangeable or exercisable) the
right to require the Company to repurchase or redeem such Capital Stock upon the
occurrence of a change in control occurring prior to the final maturity date of
the Notes shall not constitute Disqualified Stock if the change in control
provisions applicable to such Capital Stock are no more favorable to such
holders than Section 3.01 hereof and such Capital Stock specifically provides
that the Company will not repurchase or redeem any such Capital Stock pursuant
to such provisions prior to the Company's repurchase of the Notes as are
required pursuant to Section 3.01 hereof.

               "Dollars" and "$" mean United States Dollars.

               "Event of Default" means:

               (1) the failure by the Company to pay interest on any Note when
          the same becomes due and payable and the continuance of any such
          failure for a period of 30 days;

               (2) the failure by the Company to pay the principal or premium of
          any Note when the same becomes due and payable at maturity, upon
          acceleration or otherwise;

               (3) the failure by the Company or any Restricted Subsidiary to
          comply with any of its agreements or covenants in, or provisions of,
          the Notes, the Guarantees or the Indenture and such failure continues
          for the period and after the no-

<PAGE>

                                      -9-

          tice specified below (except in the case of a default under Section
          3.01 or 3.08, which will constitute Events of Default with notice but
          without passage of time);

               (4) the acceleration of any Indebtedness (other than Non-Recourse
          Indebtedness) of the Company or any Restricted Subsidiary that has an
          outstanding principal amount of $25 million or more, individually or
          in the aggregate, and such acceleration does not cease to exist, or
          such Indebtedness is not satisfied, in either case within 30 days
          after such acceleration;

               (5) the failure by the Company or any Restricted Subsidiary to
          make any principal or interest payment in an amount of $25 million or
          more, individually or in the aggregate, in respect of Indebtedness
          (other than Non-Recourse Indebtedness) of the Company or any
          Restricted Subsidiary within 30 days of such principal or interest
          becoming due and payable (after giving effect to any applicable grace
          period set forth in the documents governing such Indebtedness);

               (6) a final judgment or judgments that exceed $25 million or
          more, individually or in the aggregate, for the payment of money
          having been entered by a court or courts of competent jurisdiction
          against the Company or any of its Restricted Subsidiaries and such
          judgment or judgments is not satisfied, stayed, annulled or rescinded
          within 60 days of being entered;

               (7) the Company or any Restricted Subsidiary that is a
          Significant Subsidiary pursuant to or within the meaning of any
          Bankruptcy Law:

                         (A) commences a voluntary case,

                         (B) consents to the entry of an order for relief
               against it in an involuntary case,

                         (C) consents to the appointment of a Custodian of it or
               for all or substantially all of its property, or

                         (D) makes a general assignment for the benefit of its
               creditors;

                         (8) a court of competent jurisdiction enters an order
          or decree under any Bankruptcy Law that:

                         (A) is for relief against the Company or any Restricted
               Subsidiary that is a Significant Subsidiary as debtor in an
               involuntary case,

                         (B) appoints a Custodian of the Company or any
               Restricted Subsidiary that is a Significant Subsidiary or a
               Custodian for all or substantially all of the property of the
               Company or any Restricted Subsidiary that is a Significant
               Subsidiary, or

<PAGE>

                                      -10-

                         (C) orders the liquidation of the Company or any
               Restricted Subsidiary that is a Significant Subsidiary,

          and the order or decree remains unstayed and in effect for 60 days; or

               (9) any Guarantee of a Guarantor which is a Significant
          Subsidiary ceases to be in full force and effect (other than in
          accordance with the terms of such Guarantee and the Indenture) or is
          declared null and void and unenforceable or found to be invalid or any
          Guarantor denies its liability under its Guarantee (other than by
          reason of release of a Guarantor from its Guarantee in accordance with
          the terms of the Indenture and the Guarantee).

               "Fair Market Value" means, with respect to any asset, the price
(after taking into account any liabilities relating to such assets) that would
be negotiated in an arm's-length transaction for cash between a willing seller
and a willing and able buyer, neither of which is under any compulsion to
complete the transaction, as such price is determined in good faith by the Board
of Directors of the Company or a duly authorized committee thereof, as evidenced
by a resolution of such Board or committee.

               "GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession of the United States, as in effect from time to time.

               "Guarantors" means (i) initially, each of:

               Allegra, LLC, a California limited liability company;
               APLAM, LLC, a California limited liability company;
               AP LHI, Inc., a California corporation;
               AP Western GP Corporation, a Delaware corporation;
               AP WP Operating Corporation, a Delaware corporation;
               AP WP Partners, L.P., a Delaware limited partnership;
               C. Richard Dobson Builders, Inc., a Virginia corporation;
               CH Investments of Texas, Inc., a Delaware corporation;
               CHI Construction Company, an Arizona corporation;
               CHTEX of Texas, Inc., a Delaware corporation;
               The Club at Pradera, Inc., a Delaware corporation (formerly DRH
                 Regrem II, Inc.);
               Continental Homes, Inc., a Delaware corporation;
               Continental Homes of Florida, Inc., a Florida corporation;
               Continental Homes of Texas, L.P., a Texas limited partnership;
               Continental Residential, Inc., a California corporation;
               D.R. Horton, Inc.-Birmingham, an Alabama corporation;
               D.R. Horton, Inc.-Chicago, a Delaware corporation;


<PAGE>

                                      -11-

               D.R. Horton, Inc.-Denver, a Delaware corporation;
               D.R. Horton, Inc.-Dietz-Crane, a Delaware corporation;
               D.R. Horton, Inc.-Greensboro, a Delaware corporation;
               D.R. Horton, Inc.-Jacksonville, a Delaware corporation;
               D.R. Horton, Inc.-Louisville, a Delaware corporation;
               D.R. Horton, Inc.-Minnesota, a Delaware corporation;
               D.R. Horton, Inc.-New Jersey, a Delaware corporation;
               D.R. Horton, Inc.-Portland, a Delaware corporation;
               D.R. Horton, Inc.-Sacramento, a California corporation;
               D.R. Horton, Inc.-Torrey, a Delaware corporation;
               D.R. Horton Los Angeles Holding Company, Inc., a California
                 corporation;
               D.R. Horton Management Company, Ltd., a Texas limited
                 partnership;
               D.R. Horton San Diego Holding Company, Inc., a California
                 corporation;
               D.R. Horton-Emerald, Ltd., a Texas limited partnership;
               D.R. Horton-Schuler Homes, LLC, a Delaware limited liability
                 company;
               D.R. Horton-Texas, Ltd., a Texas limited partnership;
               DRH Cambridge Homes, LLC, a Delaware limited liability company;
               DRH Cambridge Homes, Inc., a California corporation;
               DRH Construction, Inc., a Delaware corporation;
               DRH Regrem III, Inc., a Delaware corporation;
               DRH Regrem IV, Inc., a Delaware corporation;
               DRH Regrem V, Inc., a Delaware corporation;
               DRH Regrem VII, LP, a Texas limited partnership;
               DRH Regrem VIII, LLC, a Delaware limited liability company;
               DRH Southwest Construction, Inc., a California corporation;
               DRH Title Company of Colorado, Inc., a Colorado corporation;
               DRH Tucson Construction, Inc., a Delaware corporation;
               DRHI, Inc., a Delaware corporation;
               HPH Homebuilders 2000 L.P., a California limited partnership;
               KDB Homes, Inc., a Delaware corporation;
               Lamco Housing, Inc., a California corporation;
               Meadows I, Ltd., a Delaware corporation;
               Meadows II, Ltd., a Delaware corporation;
               Meadows VIII, Ltd., a Delaware corporation;
               Meadows IX, Inc., a New Jersey corporation;
               Meadows X, Inc., a New Jersey corporation;
               Melody Homes, Inc., a Delaware corporation;
               Melmort Co., a Colorado corporation;
               Porter GP LLC, a Delaware limited liability company;
               Schuler Homes of Arizona, LLC, a Delaware limited liability
                 company;
               Schuler Homes of California, Inc., a California corporation;
               Schuler Homes of Oregon, Inc., an Oregon corporation;
               Schuler Homes of Washington, Inc., a Washington corporation;
               Schuler Mortgage, Inc., a Delaware corporation;
               Schuler Realty Hawaii, Inc., a Hawaii corporation;

<PAGE>

                                      -12-

               SGS Communities at Grande Quay, LLC, a New Jersey limited
                 liability company;
               SHA Construction LLC, a Delaware limited liability company;
               SHLR of California, Inc., a California corporation;
               SHLR of Colorado, Inc., a Colorado corporation;
               SHLR of Nevada, Inc., a Nevada corporation;
               SHLR of Utah, Inc., a Utah corporation;
               SHLR of Washington, Inc., a Washington corporation;
               SRHI LLC, a Delaware limited liability company;
               SSHI LLC, a Delaware limited liability company;
               Vertical Construction Corporation, a Delaware corporation;
               Western Pacific Funding, Inc., a California corporation;
               Western Pacific Housing, Inc., a Delaware corporation;
               Western Pacific Housing Management, Inc., a California
                 corporation;
               Western Pacific Housing Co., a California corporation;
               Western Pacific Housing-Antigua, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Aviara, L.P., a California limited
                 partnership;
               Western Pacific Housing-Boardwalk, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Broadway, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Canyon Park, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Carmel, LLC, a Delaware limited liability
                 company;
               Western Pacific Housing-Carrillo, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Communications Hill, LLC, a Delaware
                 limited liability company;
               Western Pacific Housing-Copper Canyon, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Creekside, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Culver City, L.P. , a California limited
                 partnership;
               Western Pacific Housing-Del Valle, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Lomas Verdes, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Lost Hills Park, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-McGonigle Canyon, LLC, a Delaware limited
                 liability company;

<PAGE>

                                      -13-

               Western Pacific Housing-Mountaingate, L.P., a California limited
                 partnership;
               Western Pacific Housing-Norco Estates, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Oso, L.P., a California limited
                 partnership;
               Western Pacific Housing-Pacific Park II, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Poinsettia, L.P., a California limited
                 partnership;
               Western Pacific Housing-Park Avenue East, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Park Avenue West, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Playa Vista, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-River Ridge, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Robinhood Ridge, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Santa Fe, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Scripps II, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Scripps, L.P., a California limited
                 partnership;
               Western Pacific Housing-Seacove, L.P., a California limited
                 partnership;
               Western Pacific Housing-Studio 528, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Terra Bay Duets, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Torrance, LLC, a Delaware limited
                 liability company;;
               Western Pacific Housing-Torrey Commercial, LLC, a Delaware
                 limited liability company;
               Western Pacific Housing-Torrey Meadows, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Torrey Multi-Family, LLC, a Delaware
                 limited liability company;
               Western Pacific Housing-Torrey Village Center, LLC, a Delaware
                 limited liability company;
               Western Pacific Housing-Vineyard Terrace, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Windemere, LLC, a Delaware limited
                 liability company;
               Western Pacific Housing-Windflower, L.P., a California limited
                 partnership;
               WPH-Camino Ruiz, LLC, a Delaware limited liability company;

<PAGE>

                                      -14-

               WPH-HPH, LLC, a Delaware limited liability company;

and (ii) each of the Company's Subsidiaries which becomes a guarantor of the
Notes pursuant to the provisions of the Indenture. An Unrestricted Subsidiary
may become a Guarantor if it (x) is so designated by resolution of the Board of
Directors of the Company and (y) executes a supplemental indenture satisfactory
to the Trustee.

               "Holder" means the Person in whose name a Note is registered in
the books of the Registrar for the Notes.

               "incurrence" has the meaning set forth in Section 3.01.

               "Indebtedness" of any Person means, without duplication, (i) any
liability of such Person (a) for borrowed money or under any reimbursement
obligation relating to a letter of credit or other similar instruments (other
than standby letters of credit or similar instrument issued for the benefit of
or surety, performance, completion or payment bonds, earnest money notes or
similar purpose undertakings or indemnifications issued by, such Person in the
ordinary course of business), (b) evidenced by a bond, note, debenture or
similar instrument (including a purchase money obligation) given in connection
with the acquisition of any businesses, properties or assets of any kind or with
services incurred in connection with capital expenditures (other than any
obligation to pay a contingent purchase price which, as of the date of
incurrence thereof is not required to be recorded as a liability in accordance
with GAAP), or (c) in respect of Capitalized Lease Obligations (to the extent of
the Attributable Debt in respect thereof), (ii) any Indebtedness of others that
such Person has guaranteed to the extent of the guarantee, (iii) to the extent
not otherwise included, the obligations of such Person under Currency Agreements
or Interest Protection Agreements to the extent recorded as liabilities not
constituting Interest Incurred, net of amounts recorded as assets in respect of
such agreements, in accordance with GAAP, and (iv) all Indebtedness of others
secured by a Lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person; provided, that Indebtedness shall not include
accounts payable, liabilities to trade creditors of such Person or other accrued
expenses arising in the ordinary course of business. The amount of Indebtedness
of any Person at any date shall be (a) the outstanding balance at such date of
all unconditional obligations as described above, net of any unamortized
discount to be accounted for as Interest Expense, in accordance with GAAP, (b)
the maximum liability of such Person for any contingent obligations under clause
(ii) above at such date, net of, any unamortized discount to be accounted for as
Interest Expense in accordance with GAAP and (c) in the case of clause (iv)
above, the lesser of (1) the fair market value of any asset subject to a Lien
securing the Indebtedness of others on the date that the Lien attaches and (2)
the amount of the Indebtedness secured.

               "Indenture" has the meaning provided in the Recitals.

               "Intangible Assets" of the Company means all unamortized debt
discount and expense, unamortized deferred charges, goodwill, patents,
trademarks, service marks, trade names, copyrights, writeups of assets over
their prior carrying value (other than

<PAGE>

                                      -15-

write-ups which occurred prior to the Issue Date and other than, in connection
with the acquisition of an asset, the write-up of the value of such asset
(within one year of its acquisition) to its fair market value in accordance with
GAAP) and all other items which would be treated as intangibles on the
consolidated balance sheet of the Company and the Restricted Subsidiaries
prepared in accordance with GAAP.

               "Interest Expense" of any Person for any period means, without
duplication, the aggregate amount of (i) interest which, in conformity with
GAAP, would be set opposite the caption "interest expense" or any like caption
on an income statement for such Person (including, without limitation, imputed
interest included in Capitalized Lease Obligations, all commissions, discounts
and other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, the net costs (but reduced by net gains) associated with
Currency Agreements and Interest Protection Agreements, amortization of other
financing fees and expenses, the interest portion of any deferred payment
obligation, amortization of discount or premium, if any, and all other noncash
interest expense other than interest and other charges amortized to cost of
sales), and (ii) all interest actually paid by the Company or a Restricted
Subsidiary under any guarantee of Indebtedness (including, without limitation, a
guarantee of principal, interest or any combination thereof) of any Person other
than the Company or any Restricted Subsidiary during such period; provided, that
Interest Expense shall exclude any expense associated with the complete
write-off of financing fees and expenses in connection with the repayment of any
Indebtedness.

               "Interest Incurred" of any Person for any period means, without
duplication, the aggregate amount of (i) Interest Expense and (ii) all
capitalized interest and amortized debt issuance costs.

               "Interest Protection Agreement" of any Person means any interest
rate swap agreement, interest rate collar agreement, option or futures contract
or other similar agreement or arrangement designed to protect such Person or any
of its Subsidiaries against fluctuations in interest rates with respect to
Indebtedness permitted to be incurred under this Supplemental Indenture.

               "Investment Grade" shall mean BBB- or higher by S&P or Baa3 or
higher by Moody's or the equivalent of such ratings by S&P or Moody's.

               "Investments" of any Person means (i) all investments by such
Person in any other Person in the form of loans, advances or capital
contributions, (ii) all guarantees of Indebtedness or other obligations of any
other Person by such Person, (iii) all purchases (or other acquisitions for
consideration) by such Person of Indebtedness, Capital Stock or other securities
of any other Person and (iv) all other items that would be classified as
investments in any other Person (including, without limitation, purchases of
assets outside the ordinary course of business) on a balance sheet of such
Person prepared in accordance with GAAP.

<PAGE>

                                      -16-

               "Issue Date" means the date on which the Notes are originally
issued under this Supplemental Indenture.

               "Lien" means, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this definition, a Person shall be deemed to own,
subject to a Lien, any Property which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such Property.

               "Marketable Securities" means (a) equity securities that are
listed on the New York Stock Exchange, the American Stock Exchange or The Nasdaq
National Market and (b) debt securities that are rated by a nationally
recognized rating agency, listed on the New York Stock Exchange or the American
Stock Exchange or covered by at least two reputable market makers.

               "Moody's" means Moody's Investors Service, Inc. or any successor
to its debt rating business.

               "Mortgage Subsidiary" means any Subsidiary of the Company
substantially all of whose operations consist of the mortgage lending business.

               "Net Cash Proceeds" means, with respect to an Asset Disposition,
cash payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
(including any cash received upon sale or disposition of such note or
receivable), but only as and when received), excluding any other consideration
received in the form of assumption by the acquiring Person of Indebtedness or
other obligations relating to the Property disposed of in such Asset Disposition
or received in any other non-cash form unless and until such non-cash
consideration is converted into cash therefrom, in each case, net of all legal,
title and recording tax expenses, commissions and other fees and expenses
incurred, and all federal, state and local taxes required to be accrued as a
liability under GAAP as a consequence of such Asset Disposition, and in each
case net of a reasonable reserve for the after-tax cost of any indemnification
or other payments (fixed and contingent) attributable to the seller's
indemnities or other obligations to the purchaser undertaken by the Company or
any of its Restricted Subsidiaries in connection with such Asset Disposition,
and net of all payments made on any Indebtedness which is secured by or relates
to such Property, in accordance with the terms of any Lien or agreement upon or
with respect to such Property or which must by its terms or by applicable law be
repaid out of the proceeds from such Asset Disposition, and net of all
contractually required distributions and payments made to minority interest
holders in Restricted Subsidiaries or joint ventures as a result of such Asset
Disposition.

               "Non-Recourse Indebtedness" with respect to any Person means
Indebtedness of such Person for which (i) the sole legal recourse for collection
of principal and interest on such Indebtedness is against the specific property
identified in the instruments

<PAGE>

                                      -17-

evidencing or securing such Indebtedness and such property was acquired with the
proceeds of such Indebtedness or such Indebtedness was incurred within 90 days
after the acquisition of such property and (ii) no other assets of such Person
may be realized upon in collection of principal or interest on such
Indebtedness. Indebtedness which is otherwise Non-Recourse Indebtedness will not
lose its character as Non-Recourse Indebtedness because there is recourse to the
borrower, any guarantor or any other Person for (i) environmental warranties and
indemnities, or (ii) indemnities for and liabilities arising from fraud,
misrepresentation, misapplication or non-payment of rents, profits, insurance
and condemnation proceeds and other sums actually received by the borrower from
secured assets to be paid to the lender, waste and mechanics' liens.

               "Notes" has the meaning provided in the Recitals.

               "Paying Agent" means the Trustee or any successor paying agent.

               "Permitted Indebtedness" means (i) Indebtedness under Credit
Facilities which does not exceed $1.0 billion principal amount outstanding at
any one time; (ii) Indebtedness in respect of obligations of the Company and its
Subsidiaries to the trustees under indentures for debt securities; (iii)
intercompany debt obligations of the Company to any Restricted Subsidiary and of
any Restricted Subsidiary to the Company or any other Restricted Subsidiary;
provided, however, that any Indebtedness of any Restricted Subsidiary or the
Company owed to any Restricted Subsidiary or that ceases to be a Restricted
Subsidiary shall be deemed to be incurred and shall be treated as an incurrence
for purposes of the first paragraph of the covenant described under "Limitations
on Indebtedness" at the time the Restricted Subsidiary in question ceases to be
a Restricted Subsidiary; (iv) Indebtedness of the Company or any Restricted
Subsidiary under any Currency Agreements or Interest Protection Agreements in a
notional amount no greater than the payments due (at the time the related
Currency Agreement or Interest Protection Agreement is entered into) with
respect to the Indebtedness or currency being hedged; (v) Purchase Money
Indebtedness; (vi) Capitalized Lease Obligations; (vii) obligations for, pledge
of assets in respect of, and guaranties of, bond financings of political
subdivisions or enterprises thereof in the ordinary course of business; (viii)
Indebtedness secured only by office buildings owned or occupied by the Company
or any Restricted Subsidiary, which Indebtedness does not exceed $20 million
aggregate principal amount outstanding at any one time; (ix) Indebtedness under
warehouse lines of credit, repurchase agreements and Indebtedness secured by
mortgage loans and related assets of mortgage lending Subsidiaries in the
ordinary course of a mortgage lending business; and (x) Indebtedness of the
Company or any Restricted Subsidiary which, together with all other Indebtedness
under this clause (x), does not exceed $30 million aggregate principal amount
outstanding at any one time.

               "Permitted Investment" means (i) Cash Equivalents; (ii) any
Investment in the Company or any Restricted Subsidiary or any Person that
becomes a Restricted Subsidiary as a result of such Investment or that is
consolidated or merged with or into, or transfers all or substantially all of
the assets of it or an operating unit or line of business to, the Company or a
Restricted Subsidiary; (iii) any receivables, loans or other considera-

<PAGE>

                                      -18-

tion taken by the Company or any Restricted Subsidiary in connection with any
asset sale otherwise permitted by the Indenture; (iv) Investments received in
connection with any bankruptcy or reorganization proceeding, or as a result of
foreclosure, perfection or enforce ment of any Lien or any judgment or
settlement of any Person in exchange for or satisfaction of Indebtedness or
other obligations or other property received from such Person, or for other
liabilities or obligations of such Person created, in accordance with the terms
of the Indenture; (v) Investments in Currency Agreements or Interest Protection
Agreements described in the definition of Permitted Indebtedness; (vi) any loan
or advance to an executive officer or director of the Company or any Restricted
Subsidiary made in the ordinary course of business; provided, however, that any
such loan or advance exceeding $1 million shall have been approved by the Board
of Directors of the Company or a committee thereof consisting of disinterested
members; (vii) Investments in joint ventures in a Real Estate Business with
unaffiliated third parties in an aggregate amount at any time outstanding not to
exceed 10% of Consolidated Tangible Assets at such time; (viii) Investments in
interests in issuances of collateralized mortgage obligations, mortgages,
mortgage loan securities or other mortgage related assets; and (ix) Investments
in an aggregate amount outstanding not to exceed $100 million.

               "Permitted Liens" means (i) Liens for taxes, assessments or
governmental or quasi-government charges or claims that (a) are not yet
delinquent, (b) are being contested in good faith by appropriate proceedings and
as to which appropriate reserves have been established or other provisions have
been made in accordance with GAAP, if required, or (c) encumber solely property
abandoned or in the process of being abandoned, (ii) statutory Liens of
landlords and carriers', warehousemen's, mechanics', suppliers', materialmen's,
repairmen's or other Liens imposed by law and arising in the ordinary course of
business and with respect to amounts that, to the extent applicable, either (a)
are not yet delinquent or (b) are being contested in good faith by appropriate
proceedings and as to which appropriate reserves have been established or other
provisions have been made in accordance with GAAP, if required, (iii) Liens
(other than any Lien imposed by the Employee Retirement Income Security Act of
1974, as amended) incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, (iv) Liens incurred or deposits made to secure the
performance of tenders, bids, leases, statutory obligations, surety and appeal
bonds, development obligations, progress payments, government contacts, utility
services, developer's or other obligations to make on-site or off-site
improvements and other obligations of like nature (exclusive of obligations for
the payment of borrowed money but including the items referred to in the
parenthetical in clause (i)(a) of the definition of "Indebtedness"), in each
case incurred in the ordinary course of business of the Company and the
Restricted Subsidiaries, (v) attachment or judgment Liens not giving rise to a
Default or an Event of Default, (vi) easements, dedications, assessment district
or similar liens in connection with municipal or special district financing,
rights-of-way, restrictions, reservations, other similar charges, burdens, and
other similar charges or encumbrances not materially interfering with the
ordinary course of business of the Company and the Restricted Subsidiaries,
(vii) zoning restrictions, licenses, restrictions on the use of real property or
minor irregularities in title thereto, which do not materially impair

<PAGE>

                                      -19-

the use of such real property in the ordinary course of business of the Company
and the Restricted Subsidiaries, (viii) Liens securing Indebtedness incurred
pursuant to clause (viii) or (ix) of the definition of Permitted Indebtedness,
(ix) Liens securing Indebtedness of the Company or any Restricted Subsidiary
permitted to be incurred under the Indenture; provided, that the aggregate
amount of all consolidated Indebtedness of the Company and the Restricted
Subsidiaries (including, with respect to Capitalized Lease Obligations, the
Attributable Debt in respect thereof) secured by Liens (other than Non-Recourse
Indebtedness and Indebtedness incurred pursuant to clause (ix) of the definition
of Permitted Indebtedness) shall not exceed 40% of Consolidated Adjusted
Tangible Assets at any one time outstanding (after giving effect to the
incurrence of such Indebtedness and the use of the proceeds thereof), (x) Liens
securing Non-Recourse Indebtedness of the Company or any Restricted Subsidiary;
provided, that such Liens apply only to the property financed out of the net
proceeds of such Non-Recourse Indebtedness within 90 days after the incurrence
of such Non-Recourse Indebtedness, (xi) Liens securing Purchase Money
Indebtedness; provided that such Liens apply only to the property acquired,
constructed or improved with the proceeds of such Purchase Money Indebtedness
within 90 days after the incurrence of such Purchase Money Indebtedness, (xii)
Liens on property or assets of the Company or any Restricted Subsidiary securing
Indebtedness of the Company or any Restricted Subsidiary owing to the Company or
one or more Restricted Subsidiaries, (xiii) leases or subleases granted to
others not materially interfering with the ordinary course of business of the
Company and the Restricted Subsidiaries, (xiv) purchase money security interests
(including, without limitation, Capitalized Lease Obligations); provided, that
such Liens apply only to the Property acquired and the related Indebtedness is
incurred within 90 days after the acquisition of such Property, (xv) any right
of first refusal, right of first offer, option, contract or other agreement to
sell an asset; provided, that such sale is not otherwise prohibited under the
Indenture, (xvi) any right of a lender or lenders to which the Company or a
Restricted Subsidiary may be indebted to offset against, or appropriate and
apply to the payment of such, Indebtedness any and all balances, credits,
deposits, accounts or money of the Company or a Restricted Subsidiary with or
held by such lender or lenders or its Affiliates, (xvii) any pledge or deposit
of cash or property in conjunction with obtaining surety, performance,
completion or payment bonds and letters of credit or other similar instruments
or providing earnest money obligations, escrows or similar purpose undertakings
or indemnifications in the ordinary course of business of the Company and its
Restricted Subsidiaries, (xviii) Liens for homeowner and property owner
association developments and assessments, (xix) Liens securing Refinancing
Indebtedness; provided, that such Liens extend only to the assets securing the
Indebtedness being refinanced, and (xx) Liens incurred in the ordinary course of
business as security for the obligations of the Company and its Restricted
Subsidiaries with respect to indemnification in respect of title insurance
providers.

               "Person" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint stock company, trust, unincorporated organization or government or any
agency or political subdivision thereof.

<PAGE>

                                      -20-

               "Preferred Stock" of any Person means all Capital Stock of such
Person which has a preference in liquidation or with respect to the payment of
dividends.

               "Property" of any Person means all types of real, personal,
tangible, intangible or mixed property owned by such Person, whether or not
included in the most recent consolidated balance sheet of such Person and its
Subsidiaries under GAAP.

               "Public Equity Offering" means an underwritten public offering of
Common Equity of the Company pursuant to an effective registration statement
filed under the Securities Act (excluding registration statements filed on Form
S-8 or any successor form).

               "Purchase Money Indebtedness" means Indebtedness of the Company
or any Restricted Subsidiary incurred for the purpose of financing all or any
part of the purchase price, or the cost of construction or improvement, of any
property to be used in the ordinary course of business by the Company and the
Restricted Subsidiaries; provided, however, that (i) the aggregate principal
amount of such Indebtedness shall not exceed such purchase price or cost and
(ii) such Indebtedness shall be incurred no later than 90 days after the
acquisition of such property or completion of such construction or improvement.

               "Qualified Stock" means Capital Stock of the Company other than
Disqualified Stock.

               "Rating Agencies" shall mean (1) S&P and (2) Moody's.

               "Real Estate Business" means homebuilding, housing construction,
real estate development or construction and related real estate activities,
including the provision of mortgage financing or title insurance.

               "Refinancing Indebtedness" means Indebtedness (to the extent not
Permitted Indebtedness) that refunds, refinances or extends any Indebtedness of
the Company or any Restricted Subsidiary (to the extent not Permitted
Indebtedness) outstanding on the Issue Date or other Indebtedness (to the extent
not Permitted Indebtedness) permitted to be incurred by the Company or any
Restricted Subsidiary pursuant to the terms of this Indenture, but only to the
extent that (i) the Refinancing Indebtedness is subordinated to the Notes or the
Guarantees, as the case may be, to the same extent as the Indebtedness being
refunded, refinanced or extended, if at all, (ii) the Refinancing Indebtedness
is scheduled to mature either (a) no earlier than the Indebtedness being
refunded, refinanced or extended or (b) after the maturity date of the Notes,
(iii) the portion, if any, of the Refinancing Indebtedness that is scheduled to
mature on or prior to the maturity date of the Notes has a Weighted Average Life
to Maturity at the time such Refinancing Indebtedness is incurred that is equal
to or greater than the Weighted Average Life to Maturity of the portion of the
Indebtedness being refunded, refinanced or extended that is scheduled to mature
on or prior to the maturity date of the Notes, and (iv) such Refinancing
Indebtedness is in an aggregate principal amount that is equal to or less than
the aggregate prin-

<PAGE>

                                      -21-

cipal amount then outstanding under the Indebtedness being refunded, refinanced
or extended.

               "Registrar" means American Stock Transfer & Trust Company or any
successor registrar of the Notes.

               "Restricted Payment" means any of the following: (i) the
declaration or payment of any dividend or any other distribution on Capital
Stock of the Company or any Restricted Subsidiary or any payment made to the
direct or indirect holders (in their capacities as such) of Capital Stock of the
Company or any Restricted Subsidiary (other than (a) dividends or distributions
payable solely in Qualified Stock and (b) in the case of Restricted
Subsidiaries, dividends or distributions payable to the Company or to a
Restricted Subsidiary); (ii) the purchase, redemption or other acquisition or
retirement for value of any Capital Stock of the Company or any Restricted
Subsidiary (other than a payment made to the Company or any Restricted
Subsidiary); and (iii) any Investment (other than any Permitted Investment),
including any Investment in an Unrestricted Subsidiary (including by the
designation of a Subsidiary of the Company as an Unrestricted Subsidiary).

               "Restricted Subsidiary" means any Subsidiary of the Company which
is not an Unrestricted Subsidiary.

               "S&P" means Standard and Poor's Ratings Group or any successor to
its debt rating business.

               "Significant Subsidiary" means any Subsidiary of the Company
which would constitute a "significant subsidiary" as defined in Rule 1-02 of
Regulation S-X under the Securities Act and the Exchange Act.

               "Subsidiary" of any Person means any corporation or other entity
of which a majority of the Capital Stock having ordinary voting power to elect a
majority of the Board of Directors or other persons performing similar functions
is at the time directly or indirectly owned or controlled by such Person.

               "Successor" has the meaning set forth in Section 3.08.

               "Supplemental Indenture" has the meaning provided in the
Preamble.

               "Trustee" means the party named as such above until a successor
replaces such party in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.

               "Unrestricted Subsidiary" means any Subsidiary of the Company so
designated by a resolution adopted by the Board of Directors of the Company or a
duly authorized committee thereof as provided below; provided that (a) the
holders of Indebtedness thereof do not have direct or indirect recourse against
the Company or any Restricted Subsidiary, and neither the Company nor any
Restricted Subsidiary otherwise has liabil-

<PAGE>

                                      -22-

ity, for any payment obligations in respect of such Indebtedness (including any
undertaking, agreement or instrument evidencing such Indebtedness), except, (i)
in each case, to the extent that the amount thereof constitutes a Restricted
Payment permitted by the Indenture, (ii) in the case of Non-Recourse
Indebtedness, to the extent such recourse or liability is for the matters
discussed in the last sentence of the definition of "Non-Recourse Indebtedness,"
or (iii) to the extent such Indebtedness is a guarantee by such Subsidiary of
Indebtedness of the Company or a Restricted Subsidiary and (b) no holder of any
Indebtedness of such Subsidiary shall have a right to declare a default on such
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity as a result of a default on any Indebtedness of the Company
or any Restricted Subsidiary. Subject to the foregoing, the Board of Directors
of the Company or a duly authorized committee thereof may designate any
Subsidiary to be an Unrestricted Subsidiary; provided, however, that (i) the net
amount (the "Designation Amount") then outstanding of all previous Investments
by the Company and the Restricted Subsidiaries in such Subsidiary will be deemed
to be a Restricted Payment at the time of such designation and will reduce the
amount available for Restricted Payments under Section 3.03 hereof, to the
extent provided therein, (ii) the Company must be permitted under Section 3.03
hereof to make the Restricted Payment deemed to have been made pursuant to
clause (i), and (iii) after giving effect to such designation, no Default or
Event of Default shall have occurred and be continuing. In accordance with the
foregoing, and not in limitation thereof, Investments made by any Person in any
Subsidiary of such Person prior to such Person's merger with the Company or any
Restricted Subsidiary (but not in contemplation or anticipation of such merger)
shall not be counted as an Investment by the Company or such Restricted
Subsidiary if such Subsidiary of such Person is designated as an Unrestricted
Subsidiary. The Board of Directors of the Company or a duly authorized committee
thereof may also redesignate an Unrestricted Subsidiary to be a Restricted
Subsidiary; provided, however, that (i) the Indebtedness of such Unrestricted
Subsidiary as of the date of such redesignation could then be incurred under
Section 3.02 hereof and (ii) immediately after giving effect to such
redesignation and the incurrence of any such additional Indebtedness, the
Company and the Restricted Subsidiaries could incur $1.00 of additional
Indebtedness under Section 3.02(a) hereof. Any such designation or redesignation
by the Board of Directors of the Company or a committee thereof will be
evidenced to the Trustee by the filing with the Trustee of a certified copy of
the resolution of the Board of Directors of the Company or a committee thereof
giving effect to such designation or redesignation and an Officers' Certificate
certifying that such designation or redesignation complied with the foregoing
conditions and setting forth the underlying calculations of such Officers'
Certificate. The designation of any Person as an Unrestricted Subsidiary shall
be deemed to include a designation of all Subsidiaries of such Person as
Unrestricted Subsidiaries; provided, however, that the ownership of the general
partnership interest (or a similar member's interest in a limited liability
company) by an Unrestricted Subsidiary shall not cause a Subsidiary of the
Company of which more than 95% of the equity interest is held by the Company or
one or more Restricted Subsidiaries to be deemed an Unrestricted Subsidiary.

<PAGE>

                                      -23-

                  "Weighted Average Life to Maturity" means, when applied to any
Indebtedness or portion thereof at any date, the number of years obtained by
dividing (i) the sum of the products obtained by multiplying (a) the amount of
each then remaining installment, sinking fund, serial maturity or other required
payment of principal, including, without limitation, payment at final maturity,
in respect thereof, by (b) the number of years (calcu lated to the nearest
one-twelfth) that will elapse between such date and the making of such payment
by (ii) the sum of all such payments described in clause (i)(a) above.

                                  ARTICLE THREE

                                    Covenants

Section 3.01.       Repurchase of Notes upon Change of Control.

                  (a)   In the event that there shall occur a Change of Control,
each Holder of Notes shall have the right, at such Holder's option, to require
the Company to purchase all or any part of such Holder's Notes on a date (the
"Repurchase Date") that is no later than 90 days after notice of the Change of
Control, at 101% of the principal amount thereof plus accrued interest to the
Repurchase Date.

                  (b)   On or before the thirtieth day after any Change of
Control, the Company is obligated to mail, or cause to be mailed, to all Holders
of record of Notes a notice regarding the Change of Control and the repurchase
right. The notice shall state the Repurchase Date, the date by which the
repurchase right must be exercised, the price for the Notes and the procedure
which the Holder must follow to exercise such right. Substantially
simultaneously with mailing of the notice, the Company shall cause a copy of
such notice to be published in a newspaper of general circulation in the Borough
of Manhattan, The City of New York. To exercise such right, the Holder of such
Note must deliver at least ten days prior to the Repurchase Date written notice
to the Company (or an agent designated by the Company for such purpose) of the
Holder's exercise of such right, together with the Note with respect to which
the right is being exercised, duly endorsed for transfer; provided, however,
that if mandated by applicable law, a Holder may be permitted to deliver such
written notice nearer to the Repurchase Date than may be specified by the
Company.

                  (c)   The Company will comply with applicable law, including
Section 14(e) of the Exchange Act and Rule 14e-1 thereunder, if applicable, if
the Company is required to give a notice of right of repurchase as a result of a
Change of Control.

Section 3.02.       Limitations on Indebtedness.

                  (a)   Until the Notes are rated Investment Grade by both
Rating Agencies (after which time the following covenant will no longer be in
effect), the Company will not, and will not cause or permit any Restricted
Subsidiary, directly or indirectly, to,

<PAGE>

                                      -24-

create, incur, assume, become liable for or guarantee the payment of
(collectively, an "incurrence") any Indebtedness (including Acquired
Indebtedness) unless, after giving effect thereto and the application of the
proceeds therefrom, the Consolidated Fixed Charge Coverage Ratio on the date
thereof would be at least 2.0 to 1.0.

                  (b)   Notwithstanding the foregoing, the provisions of this
Supplemental Indenture will not prevent the incurrence of: (i) Permitted
Indebtedness, (ii) Refinancing Indebtedness, (iii) Non-Recourse Indebtedness,
(iv) any Guarantee of Indebtedness of the Company represented by the Notes and
(v) any guarantee of Indebtedness incurred under Credit Facilities in compliance
with this Indenture.

                  (c)   For purposes of determining compliance with this
covenant, in the event that an item of Indebtedness may be incurred through the
first paragraph of this covenant or by meeting the criteria of one or more of
the types of Indebtedness described in the second paragraph of this covenant (or
the definitions of the terms used therein), the Company, in its sole discretion,
(i) may classify such item of Indebtedness under and comply with either of such
paragraphs (or any of such definitions), as applicable, (ii) may classify and
divide such item of Indebtedness into more than one of such paragraphs (or
definitions), as applicable, and (iii) may elect to comply with such paragraphs
(or definitions), as applicable, in any order.

                  (d)   The Company will not, and will not cause or permit any
Guarantor to, directly or indirectly, in any event incur any Indebtedness that
purports to be by its terms (or by the terms of any agreement governing such
Indebtedness) subordinated to any other Indebtedness of the Company or of such
Guarantor, as the case may be, unless such Indebtedness is also by its terms (or
by the terms of any agreement governing such Indebtedness) made expressly
subordinated to the Notes or the Guarantee of such Guarantor, as the case may
be, to the same extent and in the same manner as such Indebtedness is
subordinated to such other Indebtedness of the Company or such Guarantor, as the
case may be.

Section 3.03.       Limitations on Restricted Payments.

                  (a)   Until the Notes are rated Investment Grade by both
Rating Agencies (after which time the following covenant will no longer be in
effect), the Company will not, and will not cause or permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment unless:

                  (i)   no Default or Event of Default shall have occurred and
          be continuing at the time of or immediately after giving effect to
          such Restricted Payment;

                  (ii)  immediately after giving effect to such Restricted
          Payment, the Company could incur at least $1.00 of Indebtedness
          pursuant to Section 3.02(a) hereof; and

<PAGE>

                                      -25-

                  (iii) immediately after giving effect to such Restricted
         Payment, the aggregate amount of all Restricted Payments (including the
         Fair Market Value of any non-cash Restricted Payment) declared or made
         after the Issue Date does not exceed the sum of (a) 50% of the
         Consolidated Net Income of the Company on a cumulative basis during the
         period (taken as one accounting period) from and including April 1,
         1998 and ending on the last day of the Company's fiscal quarter
        immediately preceding the date of such Restricted Payment (or in the
         event such Consolidated Net Income shall be a deficit, minus 100% of
         such deficit), plus (b) 100% of the aggregate net cash proceeds of and
         the fair market value of Property received by the Company from (1) any
         capital contribution to the Company after June 9, 1997 or any issue or
         sale after June 9, 1997 of Qualified Stock (other than to any
         Subsidiary of the Company) and (2) the issue or sale after June 9, 1997
         of any Indebtedness or other securities of the Company convertible into
         or exercisable for Qualified Stock of the Company that have been so
         converted or exercised, as the case may be, plus (c) $86.0 million,
         which is equal to the aggregate principal amount of the Company's
         6-7/8% Convertible Subordinated Notes due 2002 that were converted into
         the Company's Common Equity prior to the Issue Date, plus (d) in the
         case of the disposition or repayment of any Investment constituting a
         Restricted Payment made after the June 9, 1997, an amount (to the
         extent not included in the calculation of the Consolidated Net Income
         referred to in (a)) equal to the lesser of (x) the return of capital
         with respect to such Investment (including by dividend, distribution or
         sale of Capital Stock) and (y) the amount of such Investment that was
         treated as a Restricted Payment, in either case, less the cost of the
         disposition or repayment of such Investment (to the extent not included
         in the calculation of the Consolidated Net Income referred to in (a)),
         plus (e) with respect to any Unrestricted Subsidiary that is
         redesignated as a Restricted Subsidiary after June 9, 1997 in
         accordance with the definition of Unrestricted Subsidiary (so long as
         the designation of such Subsidiary as an Unrestricted Subsidiary was
         treated as a Restricted Payment made after June 9, 1997 and only to the
         extent not included in the calculation of the Consolidated Net Income
         referred to in (a)), an amount equal to the lesser of (x) the
         proportionate interest of the Company or a Restricted Subsidiary in an
         amount equal to the excess of (I) the total assets of such Subsidiary,
         valued on an aggregate basis at the lesser of book value and Fair
         Market Value thereof, over (II) the total liabilities of such
         Subsidiary, determined in accordance with GAAP, and (y) the Designation
         Amount at the time of such Subsidiary's designation as an Unrestricted
         Subsidiary, plus (f) $50 million minus (g) the aggregate amount of all
         Restricted Payments (other than Restricted Payments referred to in
         clause (C) of the immediately succeeding paragraph) made after June 9,
         1997 through the Issue Date.

                  (b)   Clauses (ii) and (iii) of paragraph (a) will not
prohibit: (A) the payment of any dividend within 60 days of its declaration if
such dividend could have been made on the date of its declaration without
violation of the provisions of this Indenture; (B) the repurchase, redemption or
retirement of any shares of Capital Stock of the Company in exchange for, or out
of the net proceeds of the substantially concurrent sale

<PAGE>

                                      -26-

(other than to a Subsidiary of the Company) of, other shares of Qualified Stock;
and (C) the purchase, redemption or other acquisition, cancellation or
retirement for value of Capital Stock, or options, warrants, equity appreciation
rights or other rights to purchase or acquire Capital Stock, of the Company or
any Subsidiary held by officers or employees or former officers or employees of
the Company or any Subsidiary (or their estates or beneficiaries under their
estates) not to exceed $20 million in the aggregate since the Issue Date;
provided, however, that each Restricted Payment described in clauses (A) and (B)
of this sentence shall be taken into account for purposes of computing the
aggregate amount of all Restricted Payments pursuant to clause (iii) of
paragraph (a).

                  (c)   For purposes of determining the aggregate and permitted
amounts of Restricted Payments made, the amount of any guarantee of any
Investment in any Person that was initially treated as a Restricted Payment and
which was subsequently terminated or expired, net of any amounts paid by the
Company or any Restricted Subsidiary in respect of such guarantee, shall be
deducted.

                  (d)   In determining the "fair market value of Property" for
purposes of clause (iii) of the paragraph (a), Property other than cash, Cash
Equivalents and Marketable Securities shall be deemed to be equal in value to
the "equity value" of the Capital Stock or other securities issued in exchange
therefor. The "equity value" of such Capital Stock or other securities shall be
equal to (i) the number of shares of Common Equity issued in the transaction (or
issuable upon conversion or exercise of the Capital Stock or other securities
issued in the transaction) multiplied by the closing sale price of the Common
Equity on its principal market on the date of the transaction (less, in the case
of Capital Stock or other securities which require the payment of consideration
at the time of conversion or exercise, the aggregate consideration payable
thereupon) or (ii) if the Common Equity is not then traded on the New York Stock
Exchange, American Stock Exchange or Nasdaq National Market, or if the Capital
Stock or other securities issued in the transaction do not consist of Common
Equity (or Capital Stock or other securities convertible into or exercisable for
Common Equity), the value of such Capital Stock or other securities as
determined by a nationally recognized investment banking firm retained by the
Board of Directors of the Company.

Section 3.04.       Limitations on Transactions with Affiliates.

                  (a)   Until the Notes are rated Investment Grade by both
Rating Agencies (after which time the following covenant will no longer be in
effect), the Company will not, and will not cause or permit any Restricted
Subsidiary to, make any loan, advance, guarantee or capital contribution to, or
for the benefit of, or sell, lease, transfer or otherwise dispose of any
property or assets to, or for the benefit of, or purchase or lease any property
or assets from, or enter into or amend any contract, agreement or understanding
with, or for the benefit of, any Affiliate of the Company or any Affiliate of
any of the Company's Subsidiaries or any holder of 10% or more of the Common
Equity of the Company (including any Affiliates of such holders), in a single
transaction or series of related transactions (each, an "Affiliate
Transaction"), except for any Affiliate Transaction the terms of which are at
least as favorable as the terms which could be obtained by

<PAGE>

                                      -27-

the Company or such Restricted Subsidiary, as the case may be, in a comparable
transaction made on an arm's length basis with Persons who are not such a
holder, an Affiliate of such a holder or an Affiliate of the Company or any of
the Company's Subsidiaries.

                  (b)   In addition, the Company will not, and will not cause or
permit any Restricted Subsidiary to, enter into an Affiliate Transaction unless
(i) with respect to any such Affiliate Transaction involving or having a value
of more than $10 million, the Company shall have (x) obtained the approval of a
majority of the Board of Directors of the Company and (y) either obtained the
approval of a majority of the Company's disinterested directors or obtained an
opinion of a qualified independent financial advisor to the effect that such
Affiliate Transaction is fair to the Company or such Restricted Subsidiary, as
the case may be, from a financial point of view and (ii) with respect to any
such Affiliate Transaction involving or having a value of more than $50 million,
the Company shall have (x) obtained the approval of a majority of the Board of
Directors of the Company and (y) delivered to the Trustee an opinion of a
qualified independent financial advisor to the effect that such Affiliate
Transaction is fair to the Company or such Restricted Subsidiary, as the case
may be, from a financial point of view.

                  (c)   Notwithstanding the foregoing, an Affiliate Transaction
will not include (i) any contract, agreement or understanding with, or for the
benefit of, or plan for the benefit of employees of the Company or its
Subsidiaries generally (in their capacities as such) that has been approved by
the Board of Directors of the Company, (ii) Capital Stock issuances to
directors, officers and employees of the Company or its Subsidiaries pursuant to
plans approved by the stockholders of the Company, (iii) any Restricted Payment
otherwise permitted under Section 3.03, (iv) any transaction between or among
the Company and one or more Restricted Subsidiaries or between or among
Restricted Subsidiaries (provided, however, no such transaction shall involve
any other Affiliate of the Company (other than an Unrestricted Subsidiary to the
extent the applicable amount constitutes a Restricted Payment permitted by this
Indenture)) and (v) any transaction between one or more Restricted Subsidiaries
and one or more Unrestricted Subsidiaries where all of the payments to, or other
benefits conferred upon, such Unrestricted Subsidiaries are substantially
contemporaneously dividended, or otherwise distributed or transferred without
charge, to the Company or a Restricted Subsidiary.

Section 3.05.       Limitations on Dispositions of Assets.

                  Until the Notes are rated Investment Grade by both Rating
Agencies (after which time the following covenant will no longer be in effect),
the Company will not, and will not cause or permit any Restricted Subsidiary to,
make any Asset Disposition unless (x) the Company (or such Restricted
Subsidiary, as the case may be) receives consideration at the time of such Asset
Disposition at least equal to the Fair Market Value thereof, and (y) not less
than 70% of the consideration received by the Company (or such Restricted
Subsidiary, as the case may be) is in the form of cash, Cash Equivalents and
Marketable Securities. The amount of any Indebtedness (other than any
Indebtedness subordinated to the Notes) of the Company or any Restricted
Subsidiary that is actually assumed by the transferee in such Asset Disposition
shall be deemed to be consideration

<PAGE>

                                      -28-

required by clause (y) above for purposes of determining the percentage of such
consideration received by the Company or the Restricted Subsidiaries. The Net
Cash Proceeds of an Asset Disposition shall, within one year, at the Company's
election, (a) be used by the Company or a Restricted Subsidiary in the business
of the construction and sale of homes conducted by the Company and the
Restricted Subsidiaries or any other business of the Company or a Restricted
Subsidiary existing at the time of such Asset Disposition or (b) to the extent
not so used, be applied to make a Net Cash Proceeds Offer for the Notes and, if
the Company or a Restricted Subsidiary elects or is required to do so, repay,
purchase or redeem any other unsubordinated Indebtedness (on a pro rata basis if
the amount available for such repayment, purchase or redemption is less than the
aggregate amount of (i) the principal amount of the Notes tendered in such Net
Cash Proceeds Offer and (ii) the lesser of the principal amount, or accreted
value, of such other unsubordinated Indebtedness, plus, in each case accrued
interest to the date of repayment, purchase or redemption) at 100% of the
principal amount or accreted value thereof, as the case may be, plus accrued
interest to the date of repurchase or repayment. Notwithstanding the foregoing,
(A) the Company will not be required to apply such Net Cash Proceeds to the
repurchase of Notes in accordance with clause (b) of the preceding sentence
except to the extent that such Net Cash Proceeds, together with the aggregate
Net Cash Proceeds of prior Asset Dispositions (other than those so used) which
have not been applied in accordance with this provision and as to which no prior
Net Cash Proceeds Offer shall have been made, exceed 5% of Consolidated Tangible
Assets and (B) in connection with any Asset Disposition, the Company and the
Restricted Subsidiaries will not be required to comply with the requirements of
clause (y) of the first sentence of this paragraph to the extent that the
aggregate non-cash consideration received in connection with such Asset
Disposition, together with the sum of all non-cash consideration received in
connection with all prior Asset Dispositions that has not yet been converted
into cash, does not exceed 5% of Consolidated Tangible Assets; provided,
however, that when any non-cash consideration is converted into cash, such cash
shall constitute Net Cash Proceeds and be subject to the preceding sentence.

Section 3.06.       Limitations on Liens.

                  The Company will not, and will not cause or permit any
Restricted Subsidiary to, create, incur, assume or suffer to exist any Liens,
other than Permitted Liens, on any of its Property, or on any shares of Capital
Stock or Indebtedness of any Restricted Subsidiary, unless contemporaneously
therewith or prior thereto all payments due under this Indenture and the Notes
are secured on an equal and ratable basis with the obligation or liability so
secured until such time as such obligation or liability is no longer secured by
a Lien.

Section 3.07.       Limitations on Restrictions Affecting Restricted
                    Subsidiaries.

                  The Company will not, and will not cause or permit any
Restricted Subsidiary to, create, assume or otherwise cause or suffer to exist
or become effective any consensual encumbrance or restriction (other than
encumbrances or restrictions imposed

<PAGE>

                                      -29-

by law or by judicial or regulatory action or by provisions of leases and other
agreements that restrict the assignability thereof) on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions on
its Capital Stock or any other interest or participation in, or measured by, its
profits, owned by the Company or any other Restricted Subsidiary, or pay
interest on or principal of any Indebtedness owed to the Company or any other
Restricted Subsidiary, (ii) make loans or advances to the Company or any other
Re stricted Subsidiary, or (iii) transfer any of its properties or assets to the
Company or any other Restricted Subsidiary, except for (a) encumbrances or
restrictions existing under or by reason of applicable law, (b) covenants or
restrictions contained in Indebtedness in effect on the Issue Date as such
covenants or restrictions are in effect on such date, (c) any restrictions or
encumbrances arising under Acquired Indebtedness; provided, that such
encumbrance or restriction applies only to either the assets that were subject
to the restriction or encumbrance at the time of the acquisition or the obligor
on such Indebtedness and its Subsidiaries, (d) any restrictions or encumbrances
arising in connection with Refinancing Indebtedness; provided, however, that any
restrictions and encumbrances of the type described in this clause (d) that
arise under such Refinancing Indebtedness shall not be materially more
restrictive than those under the agreement creating or evidencing the
Indebtedness being refunded, refinanced, replaced or extended, (e) any Permitted
Lien, or any other agreement restricting the sale or other disposition of
property, securing Indebtedness permitted by this Indenture if such Permitted
Lien or agreement does not expressly restrict the ability of a Subsidiary of the
Company to pay dividends or make or repay loans or advances prior to default
thereunder, (f) reasonable and customary borrowing base covenants set forth in
agreements evidencing Indebtedness otherwise permitted by this Indenture, (g)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Company or any Restricted Subsidiary, and (h) any
restriction with respect to a Restricted Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of all or substantially all
of the Capital Stock or assets of such Restricted Subsidiary pending the closing
of such sale or disposition.

Section 3.08.       Limitations on Mergers, Consolidations and Sales of Assets.

                  Neither the Company nor any Guarantor will consolidate or
merge with or into, or sell, lease, convey or otherwise dispose of all or
substantially all of its assets (including, without limitation, by way of
liquidation or dissolution), or assign any of its obligations under the Notes,
the Guarantees or this Indenture (as an entirety or substantially in one
transaction or in a series of related transactions), to any Person (in each case
other than in a transaction in which the Company or a Restricted Subsidiary is
the survivor of a consolidation or merger, or the transferee in a sale, lease,
conveyance or other disposition) unless: (i) the Person formed by or surviving
such consolidation or merger (if other than the Company or the Guarantor, as the
case may be), or to which such sale, lease, conveyance or other disposition or
assignment will be made (collectively, the "Successor"), is a corporation or
other legal entity organized and existing under the laws of the United States or
any state thereof or the District of Columbia, and the Successor assumes by
supplemental indenture in a form reasonably satisfactory to the Trustee all of
the obligations of the Company or the Guarantor, as the case may be, under the
Notes or a Guarantee,

<PAGE>

                                      -30-

as the case may be, and the Indenture, (ii) immediately after giving effect to
such transaction, no Default or Event of Default has occurred and is continuing,
(iii) immediately after giving effect to such transaction and the use of any net
proceeds therefrom, on a pro forma basis, the Consolidated Net Worth of the
Company or the Successor (in the case of a transaction involving the Company),
as the case may be, would be at least equal to the Consolidated Net Worth of the
Company immediately prior to such transaction (exclusive of any adjustments to
Consolidated Net Worth attributable to transaction costs) less any amount
treated as a Restricted Payment in connection with such transaction in
accordance with this Indenture and (iv) unless prior to such transaction the
Notes are rated Investment Grade by both Rating Agencies (after which this
clause (iv) shall not apply), immediately after giving effect to such
transaction, the Company could incur at least $1.00 of Indebtedness pursuant to
Section 3.02(a) hereof. The foregoing provisions shall not apply to (i) a
transaction involving the sale or disposition of Capital Stock of a Guarantor,
or the consolidation or merger of a Guarantor, or the sale, lease, conveyance or
other disposition of all or substantially all of the assets of a Guarantor, that
in any such case results in such Guarantor being released from its Guarantee
pursuant to the Indenture or (ii) a transaction the purpose of which is to
change the state of incorporation of the Company or any Guarantor.

Section 3.09.       Reports to Holders of Notes.

                  The Company will file with the Commission the annual reports
and the information, documents and other reports required to be filed pursuant
to Section 13 or 15(d) of the Exchange Act. The Company will file with the
Trustee and mail to each Holder of record of Notes such reports, information and
documents within 15 days after it files them with the Commission. In the event
that the Company is no longer subject to these periodic requirements of the
Exchange Act, it will nonetheless continue to file reports with the Commission
and the Trustee and mail such reports to each Holder of Notes as if it were
subject to such reporting requirements. Regardless of whether the Company is
required to furnish such reports to its stockholders pursuant to the Exchange
Act, the Company will cause its consolidated financial statements and a
"Management's Discussion and Analysis of Results of Operations and Financial
Condition" written report, similar to those that would have been required to
appear in annual or quarterly reports, to be delivered to Holders of Notes.

                                  ARTICLE FOUR

                                  Miscellaneous

Section 4.01.       Governing Law.

                  The laws of the State of New York shall govern this
Supplemental Indenture, the Securities of each Series and the Guarantees.

<PAGE>

                                      -31-

Section 4.02.       No Adverse Interpretation of Other Agreements.

                  This Supplemental Indenture may not be used to interpret
another indenture, loan or debt agreement of the Company or a Subsidiary. Any
such indenture, loan or debt agreement may not be used to interpret this
Supplemental Indenture.

Section 4.03.       No Recourse Against Others.

                  All liability described in paragraph 13 of the Notes of any
director, officer, employee or stockholder, as such, of the Company or any
Guarantor is waived and released.

Section 4.04.       Successors and Assigns.

                  All covenants and agreements of the Company and the Guarantors
in this Supplemental Indenture and the Notes shall bind its successors and
assigns. All agreements of the Trustee in this Supplemental Indenture shall bind
its successors and assigns.

Section 4.05.       Duplicate Originals.

                  The parties may sign any number of copies of this Supplemental
Indenture. Each signed copy shall be an original, but all of them together
represent the same agreement.

Section 4.06.       Severability.

                  In case any one or more of the provisions contained in this
Supplemental Indenture or in the Notes shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Supplemental
Indenture or of the Notes.

<PAGE>

                                   SIGNATURES

               IN WITNESS WHEREOF, the parties have caused this Supplemental
Indenture to be duly executed, all as of the date first above written.

                                 D.R. HORTON, INC.


                                 By:    /s/ Samuel R. Fuller
                                       -----------------------------------------
                                       Samuel R. Fuller
                                       Executive Vice President, Treasurer and
                                       Chief Financial Officer

<PAGE>

                           GUARANTORS:

                           C. RICHARD DOBSON BUILDERS, INC.
                           CHI CONSTRUCTION COMPANY
                           CHTEX OF TEXAS, INC.
                           CONTINENTAL HOMES, INC.
                           CONTINENTAL HOMES OF FLORIDA, INC.
                           CONTINENTAL RESIDENTIAL, INC.
                           D.R. HORTON, INC. - BIRMINGHAM
                           D.R. HORTON, INC. - CHICAGO
                           D.R. HORTON, INC. - DENVER
                           D.R. HORTON, INC. - DIETZ-CRANE
                           D.R. HORTON, INC. - GREENSBORO
                           D.R. HORTON, INC. - JACKSONVILLE
                           D.R. HORTON, INC. - LOUISVILLE
                           D.R. HORTON, INC. - MINNESOTA
                           D.R. HORTON, INC. - NEW JERSEY
                           D.R. HORTON, INC. - PORTLAND
                           D.R. HORTON, INC. - SACRAMENTO
                           D.R. HORTON, INC. - TORREY
                           D.R. HORTON LOS ANGELES HOLDING COMPANY, INC.
                           D.R. HORTON SAN DIEGO HOLDING COMPANY, INC.
                           DRH CAMBRIDGE HOMES, INC.
                           DRH CONSTRUCTION, INC.
                           DRH REGREM III, INC.
                           DRH REGREM IV, INC.
                           DRH REGREM V, INC.
                           DRH SOUTHWEST CONSTRUCTION, INC.
                           DRH TITLE COMPANY OF COLORADO, INC.
                           DRH TUCSON CONSTRUCTION, INC.
                           DRHI, INC.
                           KDB HOMES, INC.
                           MEADOWS I, LTD.
                           MEADOWS VIII, LTD.
                           MEADOWS IX, INC.
                           MEADOWS X, INC.
                           THE CLUB AT PRADERA, INC. (formerly DRH REGREM II,
                           INC.)

                           By:  /s/ Samuel R. Fuller
                                -----------------------------------------------
                                Samuel R. Fuller
                                Treasurer

<PAGE>

                           CH INVESTMENTS OF TEXAS, INC.
                           MEADOWS II, LTD.

                           By:   /s/ William Peck
                                 ---------------------------------------------
                                 William Peck
                                 President

<PAGE>

                           CONTINENTAL HOMES OF TEXAS, L.P.

                           By: CHTEX of Texas, Inc., its general partner

                               By:    /s/ Samuel R. Fuller
                                      -----------------------------------------
                                      Samuel R. Fuller, Treasurer


                           D.R. HORTON MANAGEMENT COMPANY, LTD.
                           D.R. HORTON - EMERALD, LTD.
                           D.R. HORTON - TEXAS, LTD.
                           DRH REGREM VII, LP

                           By: Meadows I, Ltd., its general partner


                               By:    /s/ Samuel R. Fuller
                                      -----------------------------------------
                                      Samuel R. Fuller, Treasurer


                           SGS COMMUNITIES AT GRANDE QUAY, LLC

                           By: Meadows IX, Inc., a member


                               By:    /s/ Samuel R. Fuller
                                      -----------------------------------------
                                      Samuel R. Fuller, Treasurer


                           and

                           By: Meadows X, Inc., a member


                               By:    /s/ Samuel R. Fuller
                                      -----------------------------------------
                                      Samuel R. Fuller, Treasurer


                           DRH CAMBRIDGE HOMES, LLC
                           DRH REGREM VIII, LLC

                           By: D.R. Horton, Inc. - Chicago, a member

<PAGE>

                               By:    /s/ Samuel R. Fuller
                                      -----------------------------------------
                                      Samuel R. Fuller
                                      Treasurer

<PAGE>

                           ALLEGRA, LLC
                           APLAM, LLC
                           WESTERN PACIFIC HOUSING CO.
                           WESTERN PACIFIC HOUSING-ANTIGUA, LLC
                           WESTERN PACIFIC HOUSING-AVIARA, L.P.
                           WESTERN PACIFIC HOUSING-BOARDWALK, LLC
                           WESTERN PACIFIC HOUSING-BROADWAY, LLC
                           WESTERN PACIFIC HOUSING-CANYON PARK, LLC
                           WESTERN PACIFIC HOUSING-CARMEL, LLC
                           WESTERN PACIFIC HOUSING-CARRILLO, LLC
                           WESTERN PACIFIC HOUSING-COMMUNICATIONS HILL, LLC
                           WESTERN PACIFIC HOUSING-CREEKSIDE, LLC
                           WESTERN PACIFIC HOUSING-CULVER CITY, L.P.
                           WESTERN PACIFIC HOUSING-LOMAS VERDES, LLC
                           WESTERN PACIFIC HOUSING-LOST HILLS PARK, LLC
                           WESTERN PACIFIC HOUSING-MCGONIGLE CANYON, LLC
                           WESTERN PACIFIC HOUSING-MOUNTAINGATE, L.P.
                           WESTERN PACIFIC HOUSING-NORCO ESTATES, LLC
                           WESTERN PACIFIC HOUSING-OSO, L.P.
                           WESTERN PACIFIC HOUSING-PARK AVENUE EAST, LLC
                           WESTERN PACIFIC HOUSING-PARK AVENUE WEST, LLC
                           WESTERN PACIFIC HOUSING-PLAYA VISTA, LLC
                           WESTERN PACIFIC HOUSING-ROBINHOOD RIDGE, LLC
                           WESTERN PACIFIC HOUSING-SANTA FE, LLC
                           WESTERN PACIFIC HOUSING-SCRIPPS II, LLC
                           WESTERN PACIFIC HOUSING-SCRIPPS, L.P.
                           WESTERN PACIFIC HOUSING-SEACOVE, L.P.
                           WESTERN PACIFIC HOUSING-STUDIO 528, LLC
                           WESTERN PACIFIC HOUSING-TERRA BAY DUETS, LLC
                           WESTERN PACIFIC HOUSING-TORRANCE, LLC
                           WESTERN PACIFIC HOUSING-TORREY COMMERCIAL, LLC
                           WESTERN PACIFIC HOUSING-TORREY MEADOWS, LLC
                           WESTERN PACIFIC HOUSING-TORREY MULTI-FAMILY, LLC
                           WESTERN PACIFIC HOUSING-TORREY VILLAGE CENTER, LLC
                           WESTERN PACIFIC HOUSING-VINEYARD TERRACE, LLC

<PAGE>

                           WESTERN PACIFIC HOUSING-WINDEMERE, LLC
                           WESTERN PACIFIC HOUSING-WINDFLOWER, L.P.
                           WPH-CAMINO RUIZ, LLC
                           WPH-HPH, LLC

                           By:   LAMCO Housing, Inc.,
                                 its Member or General Partner

                                 By:  /s/ Samuel R. Fuller
                                      -----------------------------------------
                                      Samuel R. Fuller
                                      Vice President

<PAGE>

                           SCHULER HOMES OF ARIZONA LLC
                           SHA CONSTRUCTION LLC

                           By:  SRHI LLC,
                                its Member

                                By:  SLHR of Nevada, Inc.,
                                     its Member

                                     By:  /s/ Samuel R. Fuller
                                          -------------------------------------
                                          Samuel R. Fuller
                                          Vice President

                           HPH HOMEBUILDERS 2000 L.P.
                           PORTER GP LLC

                           By:  WPH-HPH, LLC,
                                its General Partner or Member

                                By:  LAMCO Housing, Inc.,
                                     its Member

                                     By:  /s/ Samuel R. Fuller
                                          -------------------------------------
                                          Samuel R. Fuller
                                          Vice President

                           AP LHI, INC.
                           AP WESTERN GP CORPORATION
                           AP WP OPERATING CORPORATION
                           LAMCO HOUSING, INC.
                           MELODY HOMES, INC.
                           MELMORT CO.
                           SCHULER HOMES OF CALIFORNIA, INC.
                           SCHULER HOMES OF OREGON, INC.
                           SCHULER HOMES OF WASHINGTON, INC.
                           SCHULER MORTGAGE, INC.
                           SCHULER REALTY HAWAII, INC.
                           SHLR OF CALIFORNIA, INC.
                           SHLR OF COLORADO, INC.
                           SHLR OF NEVADA, INC.
                           SHLR OF UTAH, INC.
                           SHLR OF WASHINGTON, INC.
                           VERTICAL CONSTRUCTION CORPORATION
                           WESTERN PACIFIC FUNDING, INC.
                           WESTERN PACIFIC HOUSING MANAGEMENT, INC.
                           WESTERN PACIFIC HOUSING, INC.

<PAGE>

                           By: /s/ Samuel R. Fuller
                               -------------------------------------------
                                Samuel R. Fuller
                                Vice President

<PAGE>

                           D.R. HORTON-SCHULER HOMES, LLC

                           By:  Vertical Construction Corporation,
                                its Manager

                                By: /s/ Samuel R. Fuller
                                    ----------------------------------------
                                     Samuel R. Fuller
                                     Vice President

                           SRHI LLC

                           By:  SHLR of Nevada, Inc.,
                                its Member

                                By: /s/ Samuel R. Fuller
                                    ----------------------------------------
                                     Samuel R. Fuller
                                     Vice President

                           SSHI LLC

                           By:  SHLR of Washington, Inc.,
                                its Member

                                By: /s/ Samuel R. Fuller
                                    ----------------------------------------
                                     Samuel R. Fuller
                                     Vice President

                           WESTERN PACIFIC HOUSING-COPPER CANYON, LLC
                           WESTERN PACIFIC HOUSING-PACIFIC PARK II, LLC
                           WESTERN PACIFIC HOUSING-POINSETTIA, L.P.
                           WESTERN PACIFIC HOUSING-DEL VALLE, LLC

                           By:  AP Western GP Corporation,
                                its Member or General Partner

                                By: /s/ Samuel R. Fuller
                                    ----------------------------------------
                                     Samuel R. Fuller
                                     Vice President

                           WESTERN PACIFIC HOUSING-RIVER RIDGE, LLC

                           By:  AP LHI, Inc.,
                                its Member

                                By: /s/ Samuel R. Fuller
                                    ----------------------------------------
                                     Samuel R. Fuller
                                     Vice President

                           AP WP PARTNERS, L.P.

<PAGE>

                           By:  AP WP Operating Corporation,
                                its General Partner

                                By: /s/ Samuel R. Fuller
                                    -----------------------------------------
                                     Samuel R. Fuller
                                     Vice President

<PAGE>

AMERICAN STOCK TRANSFER &
  TRUST COMPANY, as Trustee


By:
    _________________________________
    Name:
    Title:

<PAGE>

                                                                       Exhibit A

          THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING
     OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
     IN THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR
     A SUCCESSOR DEPOSITORY. THIS SECURITY IS NOT EXCHANGEABLE
     FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN
     THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
     CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF
     THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A
     WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY
     A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
     NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE
     LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

          UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
     REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
     CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
     REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
     CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
     OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
     REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO.
     OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
     REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE
     HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
     WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
     CO., HAS AN INTEREST HEREIN.

                                       A-1

<PAGE>

                                D.R. HORTON, INC.

                           7.5% SENIOR NOTES DUE 2007

No.                                                                  CUSIP No.:


D.R. Horton, Inc., a Delaware corporation, promises to pay to _________________

or registered assigns
the principal sum of                                 Dollars on December 1, 2007

Interest Payment Dates: June 1 and December 1 commencing June 1, 2003

Interest Record Dates: May 15 and November 15

                                         Dated:

                                         D.R. HORTON, INC.


                                         By: ___________________________________
                                             Name:
                                             Title:


                                         By: ___________________________________
                                             Name:
                                             Title:

American Stock Transfer & Trust
Company, as Trustee, certifies that this is
one of the Securities referred to in the
within mentioned Indenture.

Date:


By: ____________________________________
           Authorized Signatory

                                      A-2

<PAGE>

                                D.R. HORTON, INC.

                           7.5% Senior Notes due 2007

1.   Interest.

               D.R. HORTON, INC. (the "Company"), a Delaware corporation,
promises to pay interest on the principal amount of this Security at the rate
per annum shown above. The Company will pay interest semiannually on June 1 and
December 1 of each year, commencing June 1, 2003, until the principal is paid or
made available for payment. Interest on the Securities will accrue from the most
recent date to which interest has been paid or duly provided for or, if no
interest has been paid, from the date of original issuance, provided that, if
there is no existing default in the payment of interest, and if this Security is
authenticated between a record date referred to on the face hereof and the next
succeeding interest payment date, interest shall accrue from such interest
payment date. Interest will be computed on the basis of a 360-day year of twelve
30-day months.

2.   Method of Payment.

               The Company will pay interest on the Securities (except defaulted
interest, if any, which will be paid on such special payment date to Holders of
record on such special record date as may be fixed by the Company) to the
persons who are registered Holders of Securities at the close of business on the
May 15 and November 15 immediately preceding the interest payment date. Holders
must surrender Securities to a Paying Agent to collect principal payments. The
Company will pay principal and interest in money of the United States that at
the time of payment is legal tender for payment of public and private debts.

3.   Paying Agent and Registrar.


               Initially, American Stock Transfer & Trust Company (the
"Trustee") will act as Paying Agent and Registrar. The Company may change or
appoint any Paying Agent, Registrar or co-Registrar without notice. The Company
or any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Registrar or co-registrar.

4.   Indenture.

               The Company issued the Securities under an Indenture dated as of
June 9, 1997 among the Company, the Guarantors and the Trustee, as supplemented
(the "Indenture"). The terms of the Securities and the Guarantees include those
stated in the Indenture and those made part of the Indenture by reference to the
Trust Indenture Act of 1939 ("TIA") as in effect on the date of the Indenture.
The Securities and the Guarantees are subject to all such terms, and Holders are
referred to the Indenture and the Act for a statement of them. Capitalized terms
not defined herein have the meanings given to those terms in the Indenture.

                                       A-3

<PAGE>

               The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture and the applicable Authorizing Resolution
or supplemental indenture. Requests may be made to: D.R. Horton, Inc., 1901
Ascension Blvd., Suite 100, Arlington, Texas 76006, Attention: Chief Financial
Officer.

5.   Redemption.

               Except as set forth in the following sentence, the Securities
will not be redeemable. The Company may redeem Securities, at any time on or
before December 1, 2005, with the net cash proceeds of one or more Public Equity
Offerings by the Company, at a redemption price equal to 107.5% of the principal
amount of such Securities, plus accrued and unpaid interest, if any, to the date
of redemption; provided, however, that at least 65% of the aggregate principal
amount of Securities, excluding any Securities held by the Company or any of its
Affiliates, remains outstanding immediately after the occurrence of such
redemption. Notice of any such redemption must be given within 60 days after the
date of the closing of the relevant Public Equity Offering.

               Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 may be redeemed in part. On and after the redemption date interest ceases
to accrue on Securities or portions of them called for redemption, provided that
if the Company shall default in the payment of such Security at the redemption
price together with accrued interest, interest shall continue to accrue at the
rate borne by the Securities.

6.   Denominations, Transfer, Exchange.

               The Securities are in registered form only without coupons in
denominations of $1,000 and integral multiples of $1,000. A Holder may transfer
or exchange Securities by presentation of such Securities to the Registrar or a
co-Registrar with a request to register the transfer or to exchange them for an
equal principal amount of Securities of other denominations. The Registrar may
require a Holder, among other things, to furnish appropriate endorsements and
transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not transfer or exchange any Security selected
for redemption, except the unredeemed part thereof if the Security is redeemed
in part, or transfer or exchange any Securities for a period of 15 days before a
selection of Securities to be redeemed.

7.   Persons Deemed Owners.

               The registered Holder of this Security shall be treated as the
owner of it for all purposes.

8.   Unclaimed Money.


               If money for the payment of principal or interest remains
unclaimed for two years, the Trustee or Paying Agent will pay the money back to
the Company at its

                                      A-4

<PAGE>

request. After that, Holders entitled to the money must look to the Company for
payment unless an abandoned property law designates another person.

9.   Amendment, Supplement, Waiver.

          Subject to certain exceptions, the Indenture or the Securities may be
amended or supplemented with the consent of the Holders of at least a majority
in principal amount of the outstanding Securities and any past default or
compliance with any provision relating to the Securities may be waived in a
particular instance with the consent of the Holders of a majority in principal
amount of the outstanding Securities. Without the consent of any Holder, the
Company and the Trustee may amend or supplement the Indenture or the Securities
to cure any ambiguity, defect or inconsistency, to provide for uncertificated
Securities in addition to or in place of certificated Securities, to create a
Series and establish its terms, to remove a Guarantor which, in accordance with
the terms of the Indenture, ceases to be liable in respect of its Guarantee, or
to make any other change, provided such action does not adversely affect the
rights of any Holder.

10.  Successor Corporation.

          When a successor corporation assumes all the obligations of its
predecessor under the Securities and the Indenture, the predecessor corporation
will be released from those obligations.

11.  Trustee Dealings With Company.

          American Stock Transfer & Trust Company, the Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its affiliates, and may
otherwise deal with the Company or its affiliates, as if it were not Trustee.

12.  No Recourse Against Others.

          A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of, such obligations or their creation. Each Holder by accepting a
Security waives and releases all such liability. The waiver and release are part
of the consideration for the issue of the Securities.

13.  Discharge of Indenture.

          The Indenture contains certain provisions pertaining to defeasance,
which provisions shall for all purposes have the same effect as if set forth
herein.

14.  Authentication.

          This Security shall not be valid until the Trustee signs the
certificate of authentication on the other side of this Security.

                                       A-5

<PAGE>

15.  Abbreviations.

          Customary abbreviations may be used in the name of a Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= custodian), and U/G/M/A (= Uniform Gift to Minors
Act).

                                      A-6

<PAGE>

                                 ASSIGNMENT FORM

     If you the Holder want to assign this Security, fill in the form below:

     I or we assign and transfer this Security to

________________________________________________________________________________

________________________________________________________________________________
              (Insert assignee's social security or tax ID number)

________________________________________________________________________________

________________________________________________________________________________

________________________________________________________________________________
             (Print or type assignee's name, address, and zip code)

and irrevocably appoint

________________________________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.

________________________________________________________________________________

Date:________________               Your signature:_____________________________

                                    (Sign exactly as your name appears on the
                                     other side of this Security)

Signature Guarantee:____________________________________________________________
                     Signature must be guaranteed by participant in a
                     recognized Signature Guarantee Medallion Program (or
                     other signature guarantor program reasonably
                     acceptable to the Trustee)

                                      A-7

<PAGE>

              [FORM OF NOTATION ON SECURITY RELATING TO GUARANTEE]

                                    GUARANTEE

          The undersigned (the "Guarantors") have unconditionally guaranteed,
jointly and severally (such guarantee by each Guarantor being referred to herein
as the "Guarantee") (i) the due and punctual payment of the principal of and
interest on the Securities, whether at maturity, by acceleration or otherwise,
the due and punctual payment of interest on the overdue principal and interest,
if any, on the Securities, to the extent lawful, and the due and punctual
performance of all other obligations of the Company to the Holders or the
Trustee all in accordance with the terms set forth in Article Nine of the
Indenture and (ii) in case of any extension of time of payment or renewal of any
Securities or any of such other obligations, that the same will be promptly paid
in full when due or performed in accordance with the terms of the extension or
renewal, whether at stated maturity, by acceleration or otherwise.

          No past, present or future stockholder, officer, director, employee or
incorporator, as such, of any of the Guarantors shall have any liability under
the Guarantee by reason of such person's status as stockholder, officer,
director, employee or incorporator. Each holder of a Security by accepting a
Security waives and releases all such liability. This waiver and release are
part of the consideration for the issuance of the Guarantees.

          Each holder of a Security by accepting a Security agrees that any
Guarantor named below shall have no further liability with respect to its
Guarantee if such Guarantor otherwise ceases to be liable in respect of its
Guarantee in accordance with the terms of the Indenture.

                                      A-8

<PAGE>

               The Guarantee shall not be valid or obligatory for any purpose
until the certificate of authentication on the Securities upon which the
Guarantee is noted shall have been executed by the Trustee under the Indenture
by the manual signature of one of its authorized officers.

                                         [Guarantors]


                                         By: ___________________________________
                                             Title:

                                      A-9

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>5
<FILENAME>dex51.txt
<DESCRIPTION>OPINION OF GIBSON, DUNN & CRUTCHER LLP
<TEXT>
<PAGE>

                                                                     EXHIBIT 5.1

                                December 2, 2002

                                                                     39334-00046

D.R. Horton, Inc.
1901 Ascension Blvd., Suite 100
Arlington, Texas  76006

          Re:  D.R. Horton, Inc. Offering of 7.5% Senior Notes due 2007

Ladies and Gentlemen:

     As counsel for D.R. Horton, Inc., a Delaware corporation (the "Company"),
we are familiar with the Company's Registration Statement on Form S-3 (as
amended, the "Registration Statement") (File No. 333-84088), filed with the
Securities and Exchange Commission (the "SEC") under the Securities Act of 1933
(as amended, the "Act"), and the prospectus and prospectus supplement with
respect thereto, dated November 22, 2002 (together, the "Prospectus"), with
respect to the proposed offering by the Company of $215,000,000 aggregate
principal amount of 7.5% Senior Notes due 2007 (the "Notes") of the Company. The
Notes will be issued pursuant to the Indenture, dated as of June 9, 1997 (the
"Indenture"), among the Company, the guarantors named therein (the "Guarantors")
and American Stock Transfer & Trust Company, as trustee (the "Trustee"), as
supplemented by the Fifteenth Supplemental Indenture, to be dated as of December
3, 2002 (the "Supplemental Indenture"), among the Company, the Guarantors and
the Trustee, and will be guaranteed pursuant to the terms of the Indenture and
the notation thereof endorsed on the Notes on a senior basis by the Guarantors
(the "Guarantees"). All capitalized terms which are not defined herein shall
have the meanings assigned to them in the Registration Statement. The Notes and
related Guarantees, the Indenture and Supplemental Indenture are referred to
herein as the "Note Documents."

     For the purpose of rendering this opinion, we have made such factual and
legal examination as we deemed necessary under the circumstances, and in that
connection we have examined, among other things, originals or copies of the
following:

          (1) The Amended and Restated Certificate of Incorporation of the
     Company, filed as an exhibit to the Company's Registration Statement (No.
     333-76175) on Form S-3, filed April 13, 1999;

<PAGE>
D.R. Horton, Inc.
December 2, 2002
Page 2






          (2) The Amended and Restated Bylaws of the Company, filed as an
     exhibit to the Company's Quarterly Report on Form 10-Q for the quarter
     ended December 31, 1998;

          (3) The Indenture and the form of Supplemental Indenture (and form of
     Notes and related Guarantees);

          (4) The Statement of Eligibility of the Trustee on Form T-1 for the
     Notes, filed as an exhibit to the Registration Statement; and

          (5) Such records of the corporate proceedings of the Company, such
     certificates and assurances from public officials, officers and
     representatives of the Company, and such other documents as we have
     considered necessary or appropriate for the purpose of rendering this
     opinion.

     In rendering the opinion expressed below, we have assumed:

          (a) The genuineness of all signatures on, and the authenticity of, all
     documents submitted to us as originals and the conformity to original
     documents of all documents submitted to us as copies. With respect to
     agreements and instruments executed by natural persons, we have assumed the
     legal competency of such persons.

          (b) Each of the parties to the Note Documents other than the Company
     (including, without limitation, the Guarantors) is a validly existing
     corporation, limited partnership or limited liability company in good
     standing under the laws of its state of formation and has all requisite
     power and authority to execute, deliver and perform its obligations under
     each of the Note Documents to which it is a party, and the execution and
     delivery of such Note Documents by such party and performance of its
     obligations thereunder have been duly authorized by all necessary action
     and do not violate any law, regulation, order, judgment or decree
     applicable to such party.

          (c) The Note Documents will be duly and validly executed and delivered
     by the Trustee. The Note Documents will constitute the legal, valid and
     binding agreements of the Trustee.

          (d) There are no agreements or understandings between or among the
     parties to the Note Documents that would expand, modify or otherwise affect
     the terms of the Note Documents or the respective rights or obligations of
     the parties thereunder.

     On the basis of the foregoing examination, and in reliance thereon, and
subject to the qualifications and limitations set forth below, we are of the
opinion that when the Notes and the Guarantees shall have been executed and
authenticated as specified in the Indenture and

<PAGE>
D.R. Horton, Inc.
December 2, 2002
Page 3

Supplemental Indenture and offered and sold as described in the Registration
Statement and the Prospectus, the Notes and Guarantees will be valid and binding
obligations of the Company and the Guarantors.

     The opinions set forth herein are subject to the following assumptions,
qualifications, limitations and exceptions:


          A. We render no opinion herein as to matters involving the laws of any
     jurisdiction other than the State of New York and the United States of
     America. Our opinions set forth herein are limited to the effect of the
     present state of applicable laws of the State of New York and the United
     States of America and to the facts as they presently exist. We assume no
     obligation to revise or supplement our opinions should the present laws, or
     the interpretation thereof, be changed or to revise or supplement these
     opinions in respect of any circumstances or events that occur subsequent to
     the date hereof.

          B. Our opinions set forth herein are subject to (i) the effect of any
     bankruptcy, insolvency, reorganization, moratorium, arrangement or similar
     laws affecting the enforcement of creditors' rights generally (including,
     without limitation, the effect of statutory or other laws regarding
     fraudulent transfers or preferential transfers) and (ii) general principles
     of equity, regardless of whether a matter is considered in a proceeding in
     equity or at law, including, without limitation, concepts of materiality,
     reasonableness, good faith and fair dealing and the possible unavailability
     of specific performance, injunctive relief or other equitable remedies.

          C. We express no opinion regarding (i) the effectiveness of any waiver
     (whether or not stated as such) under the Note Documents of, or any consent
     thereunder relating to, any unknown future rights or the rights of any
     party thereto existing, or duties owing to it, as a matter of law, (ii) the
     effectiveness of any waiver (whether or not stated as such) contained in
     the Note Documents of rights of any party, or duties owing to it, that is
     broadly or vaguely stated or does not describe the right or duty
     purportedly waived with reasonable specificity, (iii) the effectiveness of
     any waiver (whether or not stated as such) contained in the Note Documents
     of stay, extension or usury laws, (iv) any provision in the Note Documents
     relating to indemnification, exculpation or contribution or (v) any
     provision of the Note Documents requiring written amendments or waivers of
     such documents insofar as it suggests that oral or other modifications,
     amendments or waivers could not be effectively agreed upon by the parties
     or that the doctrine of promissory estoppel might not apply.

          D. We express no opinion as to (i) the effect on the enforceability of
     any Guarantee against any Guarantor of any facts or circumstances occurring
     after the date hereof that would constitute a defense to the obligation of
     a guarantor or surety or (ii) the

<PAGE>
D.R. Horton, Inc.
December 2, 2002
Page 4






     effectiveness of any waiver of any such defense by any Guarantor under the
     Note Documents.


     This opinion may be filed as an exhibit to the Registration Statement.
Consent is also given to the reference to this firm under the caption "Legal
Matters" in the prospectus contained in the Registration Statement. In giving
this consent, we do not admit we are included in the category of persons whose
consent is required under Section 7 of the Act or the rules and regulations of
the Commission promulgated thereunder.



                                        Very truly yours,



                                        /s/ Gibson, Dunn & Crutcher LLP
                                        GIBSON, DUNN & CRUTCHER LLP



IFS/RWB/LMA



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12.1
<SEQUENCE>6
<FILENAME>dex121.txt
<DESCRIPTION>COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TEXT>
<PAGE>

                                                                  EXHIBIT 12.1


                                D.R. HORTON, INC.
                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
     AND SUPPLEMENTAL PRO FORMA COMBINED RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>

                                                                  COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                                                -----------------------------------------------------------------------------------
                                                                                                                For the nine months
                                                           For the fiscal years ended September 30,                ended June 30,
                                                ------------------------------------------------------------   --------------------
                                                 1997         1998         1999         2000         2001       2001         2002
                                                ------------------------------------------------------------   --------------------
                                                                                  (dollars in thousands)
<S>                                            <C>          <C>         <C>        <C>           <C>        <C>          <C>
Consolidated pretax income before cumulative
effect of change in accounting principle.....  $108,550     $159,099     $263,826     $309,224     $407,797  $268,975     $429,278

Amortization of capitalized interest.........    29,323       47,995       58,153       69,566       91,401    60,724       89,557

Interest expensed............................    11,707       17,453       18,565       18,680       17,695    12,756       12,805
                                               --------     --------     --------     --------     --------  --------     --------

            Earnings.........................  $149,580     $224,547     $340,544     $397,470     $516,893  $342,455     $531,640
                                               --------     --------     --------     --------     --------  --------     --------

Interest incurred............................  $ 51,978     $ 71,649     $ 83,090     $112,813     $139,914  $100,999     $149,177
                                               --------     --------     --------     --------     --------  --------     --------

            Fixed charges....................  $ 51,978     $ 71,649     $ 83,090     $112,813     $139,914  $100,999     $149,177
                                               --------     --------     --------     --------     --------  --------     --------

Ratio of earnings to fixed charges...........      2.88         3.13         4.10         3.52         3.69      3.39         3.56
                                               ========     ========     ========     ========     ========  =========    ========
</TABLE>

<TABLE>
<CAPTION>

                                                  COMPUTATION OF SUPPLEMENTAL
                                                     PRO FORMA COMBINED
                                                    WITH SCHULER RATIO OF
                                                   EARNINGS TO FIXED CHARGES
                                                -------------------------------
                                                   For the          For the
                                                  year ended       nine months
                                                 September 30,    ended June 30,
                                                      2001            2002
                                                --------------    --------------
                                                     (dollars in thousands)
<S>                                          <C>                <C>
Consolidated pretax income before cumulative
effect of change in accounting principle.....       $   533,699     $   482,557

Amortization of capitalized interest.........           149,761         108,670

Interest expensed............................            25,636          14,144
                                                    -----------     -----------

            Earnings.........................       $   709,096     $   605,371
                                                    -----------     -----------

Interest incurred............................       $   208,685     $   172,958
                                                    -----------     -----------

            Fixed charges....................       $   208,685     $   172,958
                                                    -----------     -----------

Ratio of earnings to fixed charges...........              3.40            3.50
                                                    ===========     ===========
</TABLE>

</TEXT>
</DOCUMENT>
</SUBMISSION>
